[dlevine]

From what I understand, the way it usually works is that LPs don't give the VC funds all of the money upfront. They pay in a portion, and then the VCs have the ability to subsequently make "capital calls" up to the total commitment value.

If the market is really bad, you could see LPs start to default on these capital calls. There are consequences to doing this, so this isn't a likely scenario, but it could happen in a worst-case scenario.