Visionaries in bull markets, operational excellence in bear markets. | by Patrick Mehrhoff | The Capital | Nov, 2022

“Visionaries in bull markets, operational excellence in bear markets.” Patrick Mehrhoff, CEO & Founder, Mehrhoff Digital

During a recession and economic downturn, investors devote their resources to supporting existing portfolio companies while neglecting those with disappointing performances.

Venture capital dealmaking and fundraising dropped sharply during Q3 of 2022.

The general impact of the FTX collapse has caused widespread damage throughout the crypto ecosystem, hitting even established VCs, such as Sequoia or Softbank hard.

Although the general belief is that it is an isolated case, particularly relevant for the crypto industry, the fact is that it will have a significant impact on other sectors that are currently looking to raise venture capital.

Private equity and venture capital funds have reversed and begun losing investors cash in the past quarter as a cocktail of interest rate hikes and a looming recession buffets the market. They are forced to reduce their leverage and accumulate significant cash reserves, limiting their ability to reinvest in the market.

This will dry up the market further, resulting in credit tightening and less liquidity for startups seeking funding for their next growth stage. It comes as the volatility that has rocked public markets spills over into private firms and sends valuations tumbling this year.

More and more insolvent businesses are still operational and are currently soliciting investment and deposits to plug holes in their balance sheets. In the current macroeconomic environment, it is unlikely that they will succeed.

In the coming days and weeks, I expect further withdrawal halts from lending platforms, crypto exchanges and other custody providers.

After a decade of research, testing and work, I know all the pitfalls of startups and SMEs and am helping them avoid making the same mistakes as their competition.

Therefore, I have created a free guide on navigating a recession and economic turmoil in your favour.

Patrick Mehrhoff is the founder and master builder of MEHRHOFF DIGITAL. Before founding the digital marketing and business development consultancy, Patrick established the marketing departments for the two most successful Swiss FinTech startups, MoneyPark and Crypto Finance. Both companies generated an exit value that exceeded 400 million with a valuation of over two bn. Patrick is a German national, a Certified FinTech Professional from the University of Hong Kong, and holds an MBA from the Power Business School.

MEHRHOFF DIGITAL is the marketing and business development consultancy for European and Asian startups and SMEs, combining high-level strategy and creative imagination with meticulous execution, fueled by a results-driven and intuitive genius, reliable data, success-based performance, and outstanding conversational wit. We help you rapidly scale your business with the most ruthlessly effective marketing strategies and tactics, enabling you to easily smash your marketing goals.‍