The relaxed and open approach to funding that saw start-ups raise record amounts of money last year could be coming to an end with the tech sector now entering a "Hunger Games" environment, venture capitalists have warned.
VC investment hit an all-time high of $128 billion in 2015, but the fourth quarter saw investment slow dramatically, according to a report by KPMG and CB Insights out this month, with the number of new unicorns – start-ups valued at over $1 billion – dropping significantly.
The reasons piled up: stock market turmoil, cancelled IPOs, writedowns and questions about whether the tech market was in a bubble.
"The world is an extremely complex place right now, I think that the volatility is certainly going to continue," Mark Goodburn, global head of advisory at KPMG, said during a panel at a CNBC technology event at Davos.
"I think if you add them up today…somewhere between 65 and 75 unicorns out there right…they won't all be winners. So will we see some failures? We will."
The tough times began in the summer when stock market volatility began to rise on concerns over the Chinese economy. This fed into European and U.S. markets with public technology firms such as Apple feeling the heat.
Towards the end of the year, start-ups slated to go public, including meal delivery firm HelloFresh and French music streaming service Deezer, pulled their flotation plans.
"In a tougher macro economy, the IPO window is closing and if M&A (mergers and acquisitions) closes as well, VCs will need liquidity and will focus on their highest performing portfolio companies," Jeff Schumacher, founder and CEO of BCG Digital Ventures, told CNBC by email.
"VC's are taking a savage approach to capital. They're starving some startups to feed the interests of their most valuable - this is the 'Hunger Games' for startups," he added, referring to the popular series of books and films that depict a dystopian world in which people are forced to fight and kill each other in an arena.
Further worries came after fund manager Fidelity in ephemeral messaging app Snapchat by 25 percent in the third quarter of last year. Dropbox suffered a similar markdown too.
But not all are painting such a gloomy picture, unconvinced they are seeing a dotcom bubble like that seen in the 2000s. Still, there is a lot more scrutiny on a start-up's finances, according to one co-founder.
"I think this has put a little bit more visibility and focus on certain elements of business to make sure that everyone is behaving in a financially responsible way…I think investors are looking more at that side and there is more scrutiny given to your finances," Taavet Hinrikus, the chief executive of London-based Transferwise.
Goodburn added that investors are asking "very tough questions" of start-ups to understand their business model.
And the volatility and correction in the private technology market does not worry all investors. In fact, Giuseppe Zocco, the co-founder of Index Ventures, one of the largest VC firms in the world, sees this environment as an opportunity.
"Frankly, in times when valuations correct, is a great opportunity to invest in the great companies and that's where the leaders can actually run ahead of the pack," Zocco said during the CNBC panel.
"What is important for us is to see the underlying businesses being built and there are many companies now…taking advantage of these last 12 months to build substantial businesses…those businesses are very different from the businesses we saw in 99, they're building real revenue streams."