Record amounts of investment were channeled to startups in 2015, much of it coming from “tourist investors” like hedge funds and mutual funds. The sudden increase in available capital drove up valuations across the industry and birthed a seemingly never-ending string of new unicorns (companies privately valued at more than $1 billion). Then came 2016, a year that could be described as dedicated to managing the effects of 2015’s funding craze. The venture capital chill was apparent from the year’s outset: Tourist investors largely abandoned the industry, leaving in their wake a large funding hole and startups with inflated valuations...