Signs of stress at venture capital firms are spreading as the industry confronts the first major economic slowdown in more than a decade.

Consider the following:

Fees cut. In January, a Sequoia partner said the storied firm had lowered management fees for two new funds due to a slower investing pace. “The changes in fee structure, communicated to investors in December, allow limited partners who committed capital to Sequoia’s crypto and ecosystem funds launched early last year to pay management fees based on capital deployed, rather than the common model of capital under management that applies to other Sequoia funds,” Reuters reported.

Funds cut. In March, Founders Fund cut the target of its eighth fund in half to about $900 million, Axios reported, citing multiple anonymous sources. The media outlet described the move as “a shot across the VC industry’s bow by firm founder Peter Thiel, and will force peers to explain why they’re not doing the same. It also puts added pressure on firms that currently are in market.”

Layoffs. Y Combinator announced in March that it laid off 17 staffers, or about 20 percent of its employees. CEO Garry Tan wrote in a blog post that the move was the result of the firm pulling back from late-stage investing, which had become a “distraction from our core mission.” The following month, Anthemis Group said it had let go of 16 employees, or about 28 percent of its staff, earlier in the year. A spokesperson for the fintech investor told TechCrunch the layoff was done “to better reflect current market conditions and to set up the business for future growth.”

You could reasonably argue that each of these events is specific to a particular firm. But I don’t think it’s a stretch to say they are all related, since the forces that gave rise to the events are affecting the overall venture industry.

Those forces include a major slowdown in exits, which has resulted in a sharp decline in distributions to LPs; lower public market valuations, which have resulted in many LPs being overallocated to private equity; and a looming recession, which is looking more likely as the Fed raises interest rates to cool the economy and bring down inflation.

All of those forces combined to bring fundraising to a screeching halt in the first quarter. Venture funds worldwide raised a combined $20.5 billion in Q1, down from $91.4 billion in the same period a year earlier, according to the KPMG Venture Pulse Report. If that pace continues, VC fundraising will fall below $100 billion for the year, after topping $280 billion in 2022 and a record $308 billion in 2021.

The big question is whether funds – particularly smaller ones – have the financial wherewithal to continue to run their operations if they have to put off fundraising for another year or cut their fund sizes. GPs that enjoyed a windfall in carried interest from years of big exits will likely be able to weather a slowdown without much pain. But what about all of the staffers whose comp comes from management fees? Will we see more firms trim their staff like Anthemis and Y Combinator? I hope the answer is no, but my gut tells me it is more likely to be yes.