The reasons for not aggressively investing are different for private and professional investors. Because of the drop in the stock market and real estate property values, private investors have less money to invest and they have other attractive investment options. Investing in start-up companies has not fared well for most investors in recent years, and now they can buy quality public stock at bargain prices. The bet is they would outperform venture investments over the next several years, and also maintain a high degree of liquidity. That is, they can turn their investments into cash at any time, which is not the case with private companies.
Venture capitalists (VCs) have committed funds from their investors so they have the capital to invest. But many of them, in consideration of their limited partners, are holding back from making capital calls. Another reason is that more of the companies in their portfolios need additional funding, which makes them conservative, hoarding capital reserve to see them through the rainy days.