We have already seen investment banks go down: only Morgan Stanley and Goldman Sachs remain, and they are now simply banks.

Hedge fundsare being pummelled and the remainder of the year doesn’t look any better.

And now the antiquated VC model is finally catching up with it.  Read more here.  I sort of called this here:

So, why are VCs panicking?  My bet is many of them will end up having their own investors balk from future commitments (if they have any) while others outright ask for their cash back.  This, of course, will lead to lawsuits etc.

The expression “a rising tide lifts all boats” also applies to VCs, who are notoriously bad at identifying good businesses and win when they carpet bomb a bunch of entrepreneurs and startups with money, hoping that one or two becomes hits.

Right now, suddenly the definition of a hit has changed… and VCs know that once they lift their skirts, they have very little to show their own investors, and this is why they are panicking… it’s almost like a domino effect.

I would have rather be wrong on this point… but the point is: this should come as no surprise.