[knowsnothing613]

seed funding usually provides an 18 month runway before more financing is needed. Mid stage runways are for a 2-5 years. You had a seed/angel funding bubble in 2010, so those companies are likely close to the end of their runways now, so they will need a cash influx. If there is a liquidity crisis, it'll be highly unlikely for them to get funding.

Also, they is still alot of inventory (mid stage web startups) from the 2007 funding bubble to work through.

Mid stage companies, funded in 2007, and had a 2-5 year runway, were waiting on the recent IPOs (Groupon, LinkedIn, Pandora, Zynga, ..) to raise appetite for their stock, but Groupon & LinkedIn, and Pandora IPOs are busts. So the capital markets will likely be closed off to them, and their will have to turn to the secondary markets. But once again, if there is a liquidity crisis, they will not get funding, and they will face a cash squeeze over the next 9-12months, depending on their burn rate.

So you have two web bubbles that will collapse, if the EZ fails. The 2007 funding bubble (digg, etc), and the 2010 angel funding bubble.

[drumdance]

It's possible, but difficult to predict. Back in 2008 Sequoia famously predicted startup capital would dry up, but it didn't come to pass. (http://venturebeat.com/2008/10/10/the-sequoia-rip-good-times...)

Of course, the rise of super angels probably played a large role in that.