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IF LIQUIDITY DOES NOT RETURN IN 2024: 4 Survival Tactics

by Dianna Raedle January 24, 2024

Entering 2024, there are green shoots that imply increasing capital markets activity, but there are also many headwinds. 

As organizations make their 2024 capital plans, they need to consider that capital market conditions do not get better.  The basis for planning survival tactics is not only to think about this time period but to also use the time to prepare for sunnier days such that when sunshine appears, capital plans can be executed quickly.

The consequences of not preparing for the downside are real.  There have been approx. 3200 private venture capital-backed companies (representing $27B in invested capital) that have gone out of business in 20231 as well as 591 corporate bankruptcies (the highest level since 2011, excluding 2020 when 639 bankruptcies took place during COVID)2.

Survival TacticDescription
Lean on “Friends of the Organization” or Long-Term RelationshipsDo not be afraid to ask for help from friends and long-term relationships. Help can take the form of everything from advice to introductions to contracts. 
Expand Depth and Breadth of Relationships / build BrandThe more relationships and the better the brand your organization has, the more likely some of these entities will be able to help when help is required.  Spend time, money and effort developing these contacts.
Make Operating Adjustments EarlyFinancial viability adjustments require time.  Therefore, these adjustments need to be made earlier than might be anticipated.
Ensure Realistic Financial AssumptionsCurrent market conditions are unforgiving, so it is important to leave rosy hued glasses off and to understand true financial conditions.  Growth requires optimism but too much optimism can be fatal in today’s conditions.

1 https://www.nytimes.com/2023/12/07/technology/tech-startups-collapse.html?smtyp=cur&smid=li-nytimes 

2 https://fortune.com/2024/01/09/how-many-businesses-bankrupt-covid-pandemic-2020-2023-global-financial-crisis/

If you would like to discuss this further – Contact us!  Or, if you or one of your clients is thinking about or has a capital opportunity – we advise to create successful outcomes.

Contact Us:

Deer Isle Group

info@deerislegroup.com

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Founded in 2007, Deer Isle is a differentiated investment bank that empowers Capital Participants with the right tools to ensure transparent, smooth, and efficient direct capital markets outreach. Since our founding, we have successfully transacted over $5 billion in capital, through Deer Isle Capital, LLC (our FINRA registered broker/dealer), for companies and funds in a wide variety of security types, sectors, and geographies.  

The foundation of our approach is innovative unbundled capital capabilities, expertise, and guidance that are customizable depending upon our client’s requirements.  

Our services, available on an “as needed” basis include:

Strategic Capital ConsultingTM (“Deer Isle Bootcamp”) to prepare for a capital or M&A transaction including Strategic Capital PositioningTM, Strategic Capital Modeling, Due Diligence Preparation and Capital Markets Landscaping.

Beacon (“Proprietary Technology”) offers “Direct Issuance/Contact” capabilities, as well as Capital Markets Brand Building, which helps ensure capital markets success today and in the future from a relevant universe of 10,000+ institutional (fiduciary) capital markets organizations/45,000+ institutional capital markets people. 

Closing Advisory/Guidance (including “Shepherding”) expertise, through Deer Isle Capital, for structuring, negotiating, and completing a successful capital/M&A transaction.