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November 06, 2023 | Tom Ballard

Three Solas BioVentures partners share advice on surviving these turbulent times

Co-Founder and Managing Director David Adair reminds companies that "cash is King!!!"

Here’s a follow-up on an article we published last month related to data from the PitchBook-NVCA Venture Monitor report for Q3 and advice that venture and angel funds are offering their portfolio companies. It involves three key executives at Chattanooga’s Solas BioVentures.

General Partner and Managing Director David Adair reminds companies that “cash is King!!! Preserve, preserve it, and manage  it to milestones. Did I mention preserve the runway?”

He adds that his advice includes trying to avoid raising money. “Try to get to 2025. If you do need it, then consider bridge from insiders. Today’s up round is a flat to -25 percent down round. There are no TRUE UP ROUNDS. Our shop and reading of tea leaves for 2024 means rough seas ahead. Get to 2025.”

David Belitz is another General Partner as well as the firm’s Chief Financial Officer. His advice: “Management has to embrace the new reality of lower valuations. This will force hard decisions. Always take the money, when it comes to fundraising. If you don’t have more than 12 months of cash currently or a clear path to positive cash flow, the company is at risk. So, if your company does get a round done, take in as much capital as you can.”

Finally, General Partner Mike Ackermann offered four insights:

  • Tranches may become more important, so defining  shorter success milestones becomes critical.
  • Keep overhead expenses, including team member salaries, “entrepreneurial” rather than “big pharma” to tie risk and reward to the team.
  • Overall, show respect for those investing in your company, keep them updated both on successes and challenges.
  • If a project fails, fail it fast.

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