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The Dow fell more than 600 points Monday

As the world headquarters of the Web 2.0 boom, the Bay Area has enjoyed a comparatively good economic run over the past couple of years, with unemployment well below the statewide average, office vacancy rates falling and a veritable frenzy of hiring for certain types of well-paid "knowledge workers."

The good news, at least in terms of the massive sell-off on Wall Street Monday that drove the Dow Jones Industrial Average down more than 600 points, is that most up-and-coming Internet companies aren't publicly traded, and many of those that are enjoy growth rates so robust that a macro slowdown won't make that big a dent.

For startups that have funding in the bank, short-term stock market fluctuations mean very little, as a rule. My friend Brad Feld, a Boulder-based venture capitalist, put it very well in a post from Friday:

In 1999, 2000, and 2001 I had a my.yahoo.com page up with a bunch of stocks, including a number of companies I was an investor in, as my home page. I’d hit refresh 5,321 times a day, generating plenty of CPM-based revenue for Yahoo. I’ve written about the emotional ups and downs in the past so I won’t repeat myself here other than to say this activity had zero impact on the stock market (I couldn’t do anything about it), it didn’t change my short term decision making (I’m not a trader), and all it resulted in was sucking a huge amount of emotional energy out of me.

Brad's unequivocal message to enterprenuers: Ignore the Dow.

There are of course some exceptions. If you're high enough up on the entrepreneurial food chain to be planning a public stock offering — we're talking about you, Zynga and Facebook — a bear market definitely puts a wrench in the works. It's not impossible to go public in a bad market, but it's hard, and not very desirable for early investors, so it doesn't happen very much.

If your business is supported by advertising, you may be looking at a fairly quick pullback in ad spending as businesses become more cautious in anticipation of a possible "double-dip" recession. Again, if you are, say, Groupon, and your business is growing at a double- or triple-digit rate, you have plenty of margin to weather a slowdown and still enjoy solid growth. But a broad-based slump in the advertising market is going to have an impact.

If you're currently looking for funding, anything that introduces uncertainty is a bad thing, ergo the market meltdown is a bad thing. In the fall of 2008, virtually all deal financing activity came to an abrupt halt, even though venture capital funds don't see their money go away just because the market is down. This may not be 2008, but VCs and angel investors alike are going to be more cautious in the next few months than they were in the last few months, at a minimum.

Beyond that, it's true that much of the tech sector is not much affected by stock market movements. That does not, however, mean that it's immune from movements in the macro economy. A renewed recession will affect most businesses, and the fact that the big Internet stocks fell in line with the market indicates the extent to which the market is reacting to fears of a recession, rather than other factors such as earnings momentum.

Outside of tech, moreover, the Bay Area economy is certainly vulnerable. The local finance sector still hasn't really recovered from 2008. State budget cuts for everything from the University of California to the state park system will be even more severe than currently anticipated if state tax collections don't continue to rebound. And real estate — well, that story wasn't getting any better even before the recent events.

Historically, the booms and busts of the tech industry have usually been powerful enough to outweigh the booms and busts of the economy as a whole. That's likely to be the case once again with the Web 2.0 boom. But just because you're better off than most doesn't mean you won't be affected. The next time someone tells you that tech is "insulated" from the stock market, all you have to do is remind them of 2001.