I am not sure what will cool the investment climate more. The fact that facebook's IPO was a disaster or that PG sent this letter and recommends to be cautious.
The goal of the VC game is to get 10x+ returns. That only happens for early or mid-stage investors if there are investors down the line investing at higher valuations. Those late stage investors depend on the IPO exit. If the late-stage investors lose confidence (which is what appears to have happened), the mid-stage investors lose confidence and thus the entire market contracts.
From the other side, the entire wall street game is crashing. People, for better or for worse, are convinced that the entire equities game is a sham. Volumes (which lead to commissions and revenue for the firms) are down in all of the asset classes, and the bonds have reached near-ponzi yields (swiss bonds actually have negative yield, which means investors are actually paying interest ...), so the "retail investor" who traditionally buy into the IPOs aren't playing a significant role anymore