With a plethora of venture capitals, the issue of funding used to be just finding the right match. Now, Series A investments are in a crunch, with investors shying away from taking risks via internet companies seeking funds. Nicole Perlroth of The New York Times calls it The Facebook Effect, citing the megacorp’s public offering plunge as the catalyst.
Because of this, and other similar industry failures, investors have become warier of risky startups, and have been spending more of their dollars on conservative and guaranteed profitable opportunities.