It's a tough time to be a startup. U.S. venture capitalists raised about $476 million less in the third quarter than in the same period a year ago, according to Thomson Reuters and the National Venture Capital Association. The San Francisco Chronicle quotes Emily Mendell, vice president of the venture capital group, saying:

If you've had trouble returning money to your investors, it's going to be much harder [now.]

One of the nation's top venture capital firms, Sequoia Capital, called together its portfolio companies last week and told them to prepare for hard times. Its 56-slide presentation is still making the rounds in the blogosphere. Its final message: "Get real or go home."

Meanwhile, Silicon Valley VC firm Benchmark Capital told clients and associates in a letter that it doesn't expect the effect on the tech industry to be as severe as 2001, which it calls the "crash on the beach," but concluded:

...It might take a long, long time before we see glory days again.