The Wall Street Journal reports that VC optimism has plummeted to an all-time low of 2.77 out of 5. In my opinion this is generally the best time to invest as valuations are low. It seems a number of these venture capitalists think we will start to rebound at the end of this year or next.
Personally I think this last year has been so financially tumultuous that exit strategies need to be reevaluated. It will take a long while for the IPO market to come back and investor confidence may ensure the stock market stays lower than historical averages for some time.
This means companies they invest in will have to make actual (heaven forbid) profit. They can't rely on an easy sell to Cisco or Google at an inflated valuation. Hopefully this means more investments in products with business plans that make sense.