A new study by Professor Mark Cannice at the University of San Francisco says there has been a big drop in confidence among venture capitalists or VCs.
It has to do with how long it takes for big companies like Google to snap up start-ups. That's when VCs get a big return on their investment.
"When it takes longer and longer to get to those points, then that in a sense hurts the business model, the revenue model of a venture capital firm, and so that will tend to weigh on confidence," he said.
Just because confidence has dropped somewhat among venture capitalists doesn't mean that they aren't putting down some serious money. Start-ups last quarter still managed to attract $6.5 billion in VC funding.
The VC firms that line Sand Hill Road are bargain hunting. Jules Maltz's firm, Institutional Venture Partners, expects to invest about $150 million this year in start-ups.
"It takes a lot less capital to start a company today, so venture firms are able fund companies for just a couple million dollars and the companies accomplish quite a bit," he said.
Critics, though, argue that the drop in confidence also reduces the appetite for risk, and that could be holding back the economy.
"This was the hotbed of risk and now we're not, we're not the leader in the world at risk taking. It's definitely holding back. It's holding back the recovery, it's holding back the employment and it's holding back the real estate market because all of these things are connected," GroundLink CEO Alex Mashinsky said.
Still, acquisition-minded companies like HP say caution is a wise strategy.
"It's not just about the money and what you can get for the quick hit. It's about what's that long-term strategic value, whatever that acquisition is going to be," HP Vice President Philip McKinney said.