Is there a silver lining lurking among the clouds?

Unquestionably, current market instability and the resulting economic slowdown are likely to make life more difficult for everyone.

Consumer spending will be radically lower, corporate spending will be curtailed, capital will become scarce, and liquidity events, if they occur at all, will be fewer and father between, at lower valuations.

But is there a silver lining lurking among the clouds?

A few thoughts:

Recruiting should become easier, since there will be fewer companies competing for a larger pool of applicants.

The quality of entrepreneur/venture capitalist relationships should improve, since the pace of decision-making is likely to be less frenetic, giving entrepreneurs and venture capitalists more time to get to know each other.

Competition should revert to normal levels with fewer duplicative companies likely to be funded, i.e. There won't be 100 video sites, 30 of which with upwards of US$25 million in funding.

Valuations are likely to be more rational, since there will be less money from non-traditional players, like hedge funds and private equity firms, artificially inflating valuations.  This will prevent companies from falling into the valuation trap and allow them to maintain flexibility.

So, while things will be bad, there will also be a positive side to the economic readjustment taking place.