I haven't observed web startups running into a "cash crunch."

That said, it does seem to me that the market is exuberant right now. There are business cycles that imply things will go the other way at some point.

I also want to point out that it's utterly specious to compare the 826 consumer web startups funded in the last two years against the 416 funded in 1998-2000. How much bigger is the total addressable market? ~200 million people in the late '90s vs. 2.1 billion today? And that doesn't include mobile.

Similarly with the comparison of VC fundraising. The capital requirements of an Internet business are completely different today than they were in the '90s. (Does anyone from Web 1.0 remember budgeting $150,000 for servers?)