'If you look in the United States, the incubator valuations have just plummeted. Over here, a lot of them are following,' said managing director of Techpacific's TP Labs Jonathan Hakim.

One incubator has been forced to seek help while some others face a smaller flow of deals. In the last few months, Digital Channel Partners from Ireland bought out former business-to-business incubator AsiAlliance. It has now begun working with more traditional, old-economy-type firms.

'We have actually sold the company to an e-commerce integrator from Europe,' said Mark Leahy, Asia-Pacific head of strategy for AsiAlliance.

'Relatively silly things got funded 18 months ago,' he said, joking that incubators might not cough up money even for a strong site called 'barofgold

.com'.

AsiAlliance is seeking more immediate revenue streams by applying its resources to the so-called bricks-and-mortar companies, which can afford to pay the bills, Mr Leahy said.

Mr Hakim said his section of Techpacific was bringing in revenues equal to only 75 per cent of the money it spends each month - operating at a loss while the rest of the company makes money from consulting work.

He has several million dollars to invest in new ventures but said it was more difficult to find strong ideas. Mr Hakim is looking at universities to encourage the commercialisation of academic projects.

Any incubator which watches cash flow dwindle as the doldrums continue will be forced to make difficult decisions, sometimes having to cut the umbilical cord to some of their start ups, said Incubasia partner Brett Rierson.

But there are some silver linings to the storm clouds as some of the market noise has cleared away, giving players greater focus and more realistic expectations.

Mr Rierson said Incubasia, which opened its doors in mid-December, raised US$12.5 million, enough money to last it for three years.

The venture facilitator is not only hunkering down with its investments but is looking westward. It plans to open a Silicon Valley office to establish a freeway of talent and money flowing between here and California, Mr Rierson said.

Victor Hwang prefers to call ICG AsiaWorks a holding company and not an incubator. It acquires interests in companies and builds them. The firm is the Asian branch of an American incubator.

The chief executive, who had worked at Goldman Sachs on investment banking deals such as Yahoo!, said the dotcom dream had not died. Instead, professional investors' scrutiny has shifted to the bottom line.

'There is no doubt that when the markets are tough, people are going to focus on the fundamentals,' Mr Hwang said.

The future for dotcom companies will not brighten for at least 12 months - and some industry players say it will take much longer. 'Everybody says: 'Oh yes, it is going to come back in one year', but it depends on the business,' Mr Hakim said.

Mr Rierson warned: 'The proof of the pudding is going to be two to 2.5 years down the line.'

'Relatively silly things got funded 18 months ago'