"We have plenty of money," shrugged Michael Moritz, a partner of Sequoia Capital, one of a group of venture capital firms that provide "seed" money to inventors and other high-tech startups.

Venture capitalists play a vital role in bringing cutting edge technologies to the mainstream market, and have been among the biggest beneficiaries of the Internet boom.

Sequoia, which provided $1 million to the Internet directory Yahoo! Inc back when it consisted of two graduate school dropouts with two borrowed computers, has seen its initial investment grow to over $1.5 billion today.

"We've been saying for three years that life has been way too easy for all of us,"Moritz said. "But we don't get carried away when euphoria is the fashion and we're not going to panic now."

Eugene Weber, president of the San Francisco venture firm Bluewater Capital Management echoed that sentiment, saying the companies that really will be hurt by the weak market are those that are much further along in the development stage and are on the brink of going public.

Despite the calm facade, however, it was not hard to detect some concern that a prolonged market downturn would eventually be felt in the startup community.

Although some venture capital investments have produced off-the-chart returns, they remain highly risky: the majority of start-up businesses fail without ever turning a profit.

And even the biggest successes like Yahoo seem to have benefited as much from the bull market as from the fundamental strength of their businesses.

Weber said the intense interest in Internet stocks earlier this summer probably has helped some more questionable businesses get funding. Goingforward, he said, it will be harder for the fringe businesses.

"The bloom may be off the rose for some second- and third-tier Internet companies," he said.