For the first time in a long time, some of venture capital's biggest names are openly worried. Sky-high valuations, easy money, and mounting burn rates are on everyone's mind (and in everyone's blog posts). But what's the private reaction?

The following email chain was sent my way by a friend of its author, David Hirsch. Hirsch is a managing partner at Metamorphic Ventures, a man our tipster describes as "without a doubt the dumbest VC on the planet." This is Valleywag, and we're not in the business of unsubstantiated snap judgments, but he does tweet things like this:

Below is an unsolicited (and unedited) email he sent to his friends, opining on the state of venture capital in The Bubble:

From: "David Hirsch" <david@mv.vc>

To: "David Hirsch" <david@mv.vc>

Cc: "Tara Eckert" <teckert@metamorphic.vc>

Subject: Fwd: Gurley's take on excessive VC risk in the WSJ

MV Founders and Friends -

Many investors , media and entrepreneurs have been pinging me on my take of gurley's article. Was waiting for later in the week to organize my thoughts. However , thought I'd send out my good friend and MV advisor note as I believe in much of what Wes articulates. The good news to most on this email is that much of what is below is deep in our/your DNA as we started as a small scrappy operational fund that believes in mega growth but also has always valued being capital efficient . While our roots have been focused on Monitization ,commerce , revenue , b2b we have also diversified categorically through the years to what's it all about : rock star teams in massive categories . By definition , rock star teams are mindful of the content below and for those companies that are more growth oriented by nature , consumer driven , etc you have heard this song from us before. We have a very bullish view on the future and innovation but with that as bob marley had sung " in this great future ; you can't forget your past " and let's all be humble and mindful and use this opportunity to seize market share and win big. Also have copied our CFO , Tara who has great experience in working w teams around burn , projections , etc and we are available for a checkup if needed. Have a great day....dlh

David L Hirsch

Metamorphic Ventures LLC

257 Park Ave. South, Floor 5

New York 10010

DH@mv.vc<mailto:DH@mv.vc>

http://www.metamorphic.vc

@startupman

Hirsch's email was itself a sort of reply to this longer, better spelled private email by Wesley Chan, an advisor at Google Ventures:

Begin forwarded message:

From: "Wesley Chan" <weschan@gmail.com<mailto:weschan@gmail.com>>

To: "David Hirsch" <david@mv.vc<mailto:david@mv.vc>>

Subject: Fwd: Gurley's take on excessive VC risk in the WSJ

I sent this to all the ceos (wael, andrew) that I've been working

with...my thoughts on Gurley's email...enjoy!

-Wes

————— Forwarded message —————

From: Wesley Chan

<weschan@gmail.com<mailto:weschan@gmail.com><mailto:weschan@gmail.com>>

Date: Mon, Sep 15, 2014 at 1:57 PM

Subject: Gurley's take on excessive VC risk in the WSJ

To: Wesley Chan

<weschan@gmail.com<mailto:weschan@gmail.com><mailto:weschan@gmail.com>>,

Pat Blute <pblute@gmail.com<mailto:pblute@gmail.com><mailto:pblute@gmail.com>>

Hi-

I don't often forward things around but I saw this in the WSJ this weekend and read it twice. If you haven't seen it, you should read thru it as well. I agree with many of his points, and hope that it will give you some time to think thru the implications it may have on on everything you're doing from fundraising, to hiring, to finding office space. Specifically, I think there are a few things (and my take below) to think about as you monitor your burn and decide on when to raise your next round:

-It's going to probably get more difficult to raise your next round without either proof that you are gaining large market share AND/OR have a strong & believable revenue/economic upside model in place AND/OR having a long/deep relationship with an investor who deeply believes you can mint cash for them in the future (usually based on you making them rich previously). Think carefully about what metrics you need to prove out for your next round and whether you can achieve them in a timely manner (e.g. before things get too tight or you run out of cash).

-Raising at a seed level is still relatively easy (as there's still a lot of hobby investors out there fueled by crowdfunding sites and YC demo days), as is raising late stage growth rounds at high valuations (but only if you're already crushing it and have a rocket ship trajectory). You're likely going to see investors pulling back at everything in between in the next 9 months or so, as the correction that Gurley talks about will likely start playing out then.

-Conserve cash, but not at the expense of taking market significant share or not hiring superb engineers that could accelerate your execution. What this means: try not to sign 10 year leases for office space from greedy landlords or fall in the trap of over-hiring in your non-technical roles, especially if you haven't figured out your monetization economics or product-market fit yet. And this also means you should avoid spending lots of money on non-essential things like big launch parties, PR consultants, or travel expensive conferences that don't yield you a lot of new partnerships/customers and ROI despite what others may be doing. Stuff like this killed a lot of companies in 1999 and 2008, so don't repeat history. Happy to talk more about this with you if you want, but the key takeaways is to be wise with your burn— hope for the best but plan for the worst. As both Buffet and Gurley point out, "be fearful when others are greedy and be greedy when others are fearful."

-Wes

There you have it. Nine months—set your boutique calendar apps!