High-flying start-ups may well be able to weather a financial markets storm after raising monster sums of cash.
However, the foundations, endowments and retirement funds that support them face a tougher slog.
Limited partners (LPs) are the institutions that provide the money venture capital firms use to invest in start-ups. On paper, funds raised over the past half decade look good, thanks to companies like Uber, Airbnb, Snapchat and SpaceX, which are all valued at more than $10 billion.
There's only one problem: It's all on paper.
Massive private funding rounds at astronomical valuations have enabled the most promising companies to stay private, avoiding the constant scrutiny that comes with a stock ticker.
But venture firms and their LPs need initial public offerings in order to turn unicorn valuations into actual cash returns.
"There's a lot of people who have a huge amount of paper gains, but total distribution to LPs is small," said George Zachary, a partner at Charles River Ventures and an early investor in Twitter, Yammer and Pebble. "LPs are very nervous about this."