Tech last week was a sea of red.
The Nasdaq 100 had its worst week since 2011. All 100 of its members fell, and about two-thirds of the index dropped by at least 5 percent.
The sudden turn, tied to a broader stock market selloff, threatens to derail a six-year rally, including five years of double-digit gains. The Nasdaq 100 is now down for the year.
Read MoreTech on track for worst week of year
So what does all this mean for the private markets, where valuations have been stretched by hedge funds, private equity shops and mutual fund companies acting as late-stage venture firms? More capital was invested in start-ups in the second quarter than in any period since 2000.
Benchmark's Bill Gurley published his viewpoints in an eight-part tweetstorm on Thursday, focusing on the renewed emphasis on profitability—or at least potential to get there—with the money in the bank.
That was before Friday's rout, which was just as bad as its predecessor. China has been the catalyst. Since the government of the world's second-largest economy devalued its currency last week, the notion that global growth is at risk has been the talk of the market.
Joe Horowitz, managing partner at Icon Ventures, calls it the "x factor that you can't always anticipate."
For venture capitalists like Gurley and Horowitz, this likely goes one of two ways. Either it's a "correction" that brings some level of rationality to a period of insanity and thus allows investors to value companies on real metrics. Or it's the start of a severe downdraft that locks up the IPO market and rubs the bright shine off so many prized venture darlings.