Last year, the Nasdaq index hit 5,000. Today, just 12 months later, it flirted with 2000.
What does this mean for an entrepreneur? Everything, and nothing.
Everything, because the supply of funding has dried up. VCs have to nuture their previous startups that can't go public. Angels are suddenly poorer (and in some cases, poor!). Corporate investors decide to stick to their knitting. And even doctors and dentists decide to splurge on espresso machines instead of seed investments.
Nothing, because the chances of any particular startup going public are so small as to be irrelevant. If your company is successful, it will probably be acquired for its potential or its cashflow, neither of which depend on the capital markets.
In fact, if you can start a company on a lean budget, this may be the best time to begin. The lack of funding has deterred the casual competitor, and you may reap a windfall if you sell your company for undervalued stock and the market rebounds.
Of course, that's easier for me to say, since I haven't invested in the market since 1998. It would be far more difficult to maintain perspective had I used my business school loans to buy dot-com stocks on margin.