There have always been bootstrapping startups. It was people exiting from bootstrapped startups that created the VC industry.
I do hope that we’re learning more about how to sensibly value early-stage startups, and to anticipate some of the problems that will cause them to fail to live up to their early valuations.
But it’s forces external to the startup industry which are the trigger for causing the bubble to collapse — collapse in real estate prices in key markets, Chinese sharemarket wobbles, Greek exit from the EU, etc.
Investors look up from their financial news one morning, turn to their own investment valuations, and think, “crap, I better exit from some of the more speculative stuff, this isn’t going to last”. Others follow them. It snowballs until the whole market can see the exit to fixed interest and cash.
Not even boot-strapped startups who never plan to raise are safe when it happens. Your valuation goes down along with everybody else’s, and key employees start looking at the value of their stock options and wondering if maybe they should go back to engineering school, or get a ‘normal’ job. Fewer people choose startups as a career, tightening the hiring pool. There are fewer service companies servicing the industry and their price to service you goes up. Customers stop spending on what they perceive as discretional or non-essential stuff, like that new SAAS subscription with your startup.