Bloomberg recently broke a story about dying startup scene in India. The article talks about how there are 800 dead or dying startups in India, as the venture investments in the country peaked at $8.9bn in 2015, and has begun to slide to reach only $2.7bn for the first 6 months of 2016.

There are many amazing books that discuss booms and busts in human history. A few of them I suggest are: Technological Revolutions and Financial Capital by Carlota Perez, A Short History of Financial Euphoria by John Kenneth Galbraith and Manias, panics and Crashes: A History of Financial Crises by Charles Kindleberger. All of these books have a common theme. Booms and manias form when abundant capital forces investors to chase “exotic and exciting” investment opportunities as they desperately search for higher yields. Often, new technology and emerging markets represent these “exciting” and cool investments that both benefit and suffer from bubbles. When the excitement fades, however, bubbles pop as investors flee to “safe-haven” assets.

India seems to be going through a similar pattern. There are plenty of reasons why India can be (and should be) exciting. It is the second most populous countries in the world, but its GDP per capita is only about $1,800, about 3% of US’s level. There are plenty of growth opportunities for the country, especially in light of the success that tis neighbor China has enjoyed for the last few decades. Investors loved these growth prospects especially when assets in their own countries offered very low returns.

As we wrote previously in “State of Global Stock Markets”, there seems to be a capital flight occurring from global financial markets into the US market (“safe-haven”). The flipside of this coin is that previously hot markets like Indian venture capital is suffering from capital drought. Too many companies that shouldn’t have been funded received investments, and everyone (investors, employees, and sometimes even founders) are waking up with a big hang-over.

It also helps to explain the phenomenon we examined in “How AirBnb, Didi Chuxing, Uber, Jet.com and Dollar Shave Club Are All Related” that smaller startups are being forced to sell themselves, while big “start-ups” continue to get more funding. In a sense, this is also a form of capital flight, and Indian startups just happen to be part of the “smaller” startups that investors deem to be riskier than their more mature counterparts.

Everything in the world, especially in the financial world, is connected. This seems to be just another piece of the puzzle that helps to illuminate the truth a bit better.

Views expressed here represent those of the author’s alone. This article is not a recommendation to take any type of action in the financial market.

This article originally appeared on ValuePenguin.

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ValuePenguin is personal finance company based in New York. DJ is responsible for building ValuePenguin’s presence in Asia, from researching personal finance topics in the region to building relationships with financial and media institutions. He previously worked as an investment analyst at leading hedge funds in New York including Cadian Capital and Tiger Asia. His expertise is in the global technology, consumer and financial industries. He graduated from Yale University with a degree in Economics, and speaks Korean, English and Mandarin Chinese.

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