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Leila Abboud and Elaine He

Silicon Valley's Cool Kids Are Turning Into Squares

VCs need to start living dangerously again.

Venture capitalists and the start-up founders they back are the cool kids of the global economy. They dream big, move fast and break things, and disrupt old-school companies in their path.

Yet the numbers now coming out of Silicon Valley show the cool kids are nervous. Although funds such as Andreessen Horowitz and Greylock Partners are raising money at a clip not seen since the dotcom era, they're deploying less of it. Capital going into start-ups globally has fallen for the last four quarters to reach $24.1 billion in the third quarter, a level not seen since two years ago, according to a KPMG and CB Insights report released Thursday. The trend holds for early and late-stage funding rounds.