DEER ISLE: Insights, Flows & Investment Trends

Are you or one of your portfolio companies (or potential referrals) waiting for capital market conditions to improve before launching or continuing capital sourcing?

We are hearing that many capital raises have been postponed due to the uncertainty of current capital market conditions. This anecdotal information was recently confirmed by a Wall Stret Journal article that stated that “Mergers, stocks and bond offerings slowed in October to the lowest level in over a decade”1     

Our strong recommendation is to use this time to better prepare rather than “just wait” for better conditions. Deer Isle “Strategic Capital ConsultingTM “ services help companies and funds which are preparing for capital sourcing to ensure that they are “institutional ready” read more.  These services include: Strategic Capital PositioningTM , Strategic Capital ModelingTMDue Diligence Preparation and Capital Markets Landscaping.  Please contact us at if you or someone you know would find these services helpful.

Some Insights from Our Network:

Venture Capital – There is still capital for “good deals”:  We are seeing continued interest in/funding for VC deals that have clear investment propositions and sustainable business models.  Example sectors include Healthcare/Biotech, Cybersecurity, ESG/Impact and Fintech.

Capital Provider Interest – Pre-FDA approval drugs that can be scaled for impact. Large European Capital Provider looking for pre-FDA approved drugs that can be launched in the US and scaled in emerging markets such as Africa.

Private Equity – Capital Available but How to Value Deals When Interest Rate Direction Uncertain. Both Capital Providers and Capital Seekers are trying to figure out valuations in this uncertain environment.  Transactions can still get done if the Capital Seeker is willing to bend on valuation.

US Economy – Growing consensus from Capital Providers on Q1 Rates/GDP Outlook:  Capital Providers with whom we interact seem to have a growing consensus that rates should peak in Q1 2023 with a likelihood of a recession.  But recession should be small and by end of Q2 see economic activity rebound and markets be in an upward trajectory.  There do not seem to be signs of severe economic distress unless there is a shock to the US from international events.