Several entreprenuers when contacted by this reporter spoke of having experienced a similar ``change of mind'' from VCs promising to invest in them. All contacts spoke strictly on condition of anonymity, but here's the bad news: names of some the leading corporates and venture capitalists figured repeatedly among the list of investors who had committed a breach of trust.

While cases of actual breach of contract may occur with increasing frequency in the weeks to come, this is only symptomatic of the larger picture which points to a situation where more caution prevails among investors when it comes to making commitments.

"Today investors sign term sheets but nothing is certain till the money is actually in the bank," says the CEO of one portal. "There are cases when the investor signs the term sheets and is then approached by other entrepreneurs who are willing to offer him a lower valuation so he gets a larger part of the company. The investor then backs out of the previous commitment," he warns.

The general consensus: the scenario where a lot of money chased too few proposals no longer prevails. While this was driving the high valuations for companies which was witnessed sometime ago, "Today, investors are getting a lot more quality conscious," remarks Munesh Khanna of Andersen Consulting. "Earlier, there was this attitude among investors that they would have to live with certain features in their investee companies even if it wasn't entirely to their liking but today they make it clear that they reserve their right to walk out of a deal," explains Khanna.

Khanna also feels that both parties - investors and entrepreneurs - are getting much more conscious about their rights and the New Economy is likely to see a lot more litigation now.

But before you rush to line up your legal beagle, beware: more than one investor cautions entrepreneurs against litigation. "Once you sue a company or start legal proceedings against an investor, you can forget about raising funds altogether," says the representative of an investing firm.

However, as far as the entrepreneur is concerned, he loses out on precious time if he is being misled by an investor. Says one entreprenuer in the B2C music space who recently suffered a nasty experience where an investor backed out at the last moment: "Luckily, I found someone else who is now interested in the company, otherwise I would have been caught in a really tight situation, having trusted this investor completely."

A prickly issue which crops up in the case of investors who abandon entreprenuers half way is one of ``conflict of interest'' which arises out of their exposure to the former's business plan. "Increasingly, we see a situation where investors ask to meet the company and then declare after a couple of meetings that they already have an investment in the same space and would not be interested in the current one," says Madhura Samarth of Liquid Equity Capital, an investment banking company, "I really think they should state up front if there is likely to be such a conflict of interest," she adds.

This is an attendant issue that crops up in the DBS Internet case as well where Indocean Chase Capital is an investor in one of DBS' competitors, the Microland-promoted Planetasia. "We were under the impression that they would consider merging the two companies at some point and have exposed our business plan, accounting plans, customer lists, the works to KPMG as we had been directed to by Indocean Chase" says an irate Shyam Sunder Agarwal of DBS Internet. "What is to stop us from thinking that Indocean has done this deliberately so they can turn this to their advantage where Planetasia is concerned?" he asks.

That could be an extreme reaction though. "Information per se is of limited use in most of these cases," says a leading venture capitalist. "The lead time that information offers is limited. It's only if proprietary information like customer lists etc are misused that it amounts to an unethical act. The key in any of these transactions is the level of comfort between the two parties," he stresses. Then again, according to some, "no amount of hand shaking and back slapping should be trusted or even letters of intent, the deal is considered done today only when the money is in the bank!''

The net result of the tumultous relationship between some VCs and entrepreneurs has been the shelving of plans for several start-ups. Says one entrepreneur who has been trying to source funds for her B2C venture in the education space, "We kept approaching VCs over the last couple of months but noticed that everyone is following the go-slow policy. I am sure things will pick up but until then we've had to shelve our plans". The message in this for entreprenuers waiting to take the plunge? In corporate courtship, slow and steady makes for the best marriages.