When 54% of Investors Face Unplanned Funding Rounds, Your Crisis Plan Better Be Ready.

In a brief survey among 20 Keystones members regarding their investments over the past five years, 54% of the businesses invested in have had unplanned funding rounds to sustain operations, and 39% are either closed, in acute crisis, or have less than six months of runway.

That’s the whole point. No theatrics. Just a fast pulse-check on reality—directional, not definitive.

If you manage a portfolio today, none of this feels exotic. The global picture doesn’t offer a warm blanket:

• PitchBook’s 2024 wrap shows nearly 25% of U.S. venture rounds were flat or down, a decade high.

• In 2025 YTD, 15.9% of deals are down rounds per PitchBook (reported by Fortune), and Carta measured ~19%down rounds in Q4 2024 and Q1 2025.

Translation: valuation pressure and bridge logic are routine, not rare.

Hands went up fast in the room. People shared real cases. The follow-ups afterward were about one thing: What do we do before the next “unplanned” round email hits the inbox? Here’s the short version—plain language, zero mystique.

Keystone event, avoid the bad Exit.

What the 54 and 39 are really telling you

They’re not a verdict on founders or investors. They’re an operational message: assume turbulence. When the base rate of funding friction rises, the boards that install early warnings and pre-agreed decision rules waste less time, spend less money, and avoid friendly fire.

People and jobs matter too. In Sifted’s 2024 founder survey, 53% reported experiencing burnout, and almost all (85%) reported high stress levels in the last year. That isn’t a side note; it degrades speed and judgment. Build for it.

What to do about it:

1) Include soft factors in due diligence

Most DD stacks overweight TAM and spreadsheets, and underweight team, decision quality, and resilience. Post-mortems show it. In CB Insights’ analysis of failed startups, “no market need” tops the list at 42%, and “not the right team” appears in 23% of cases. If your DD doesn’t put structured weight on leadership capability and decision cadence, you’re pricing luck.

2) Discuss crisis what-if plans from day one

Scenario thinking is not pessimism; it’s speed insurance. It has been known for years that scenario planning is practical—what if we lose our largest customers? What if we lose a key employee or the new product is delayed for 6 months?

Agree in advance what happens, who decides what, and what gets cut first, before the storm, not during it. In a crisis, it’s days/weeks, not months. In my “Day 5” piece, I explained why the first week sets the type and timing of decisions. The board that names a crisis lead, protects liquidity, and initiates an external diagnostic by Day 5 tends to survive and thrive (See last edition for the pattern.)

3) Balance internal metrics with external KPIs

Internal metrics tell you how you are doing; external KPIs tell you how you’re doing for customers and against the market. When “no market need” is the #1 post-mortem reason, ignoring outside-in signals is malpractice. Speak with customers directly before investing. Track competitor win rates and switching triggers, not just MRR and churn.

4) Put crisis-experienced people on the board/advisory before you need them.

When stress spikes, leadership resets are common. In PE-backed companies, 58% of portfolio CEOs are replaced within two years, and 73% over the investment lifecycle.

That isn’t easy in startups, where you typically need the founders. Instead, bring crisis experience to the board or advisory board—people who can dedicate the required time with the founder when the pressure mounts.

Why this Danish pulse fits the bigger picture (and why “90% fail” is lazy math)

The cliché that “90% of businesses fail” is a zombie stat. U.S. SBA/BLS data show a five-year survival rate of ~49% and a ten-year survival rate of ~34%, still tough, but not 90%.

Pair that with the decade-high share of flat/down rounds in 2024, and our Danish pulse (54%/39%) looks like a local snapshot of a global pattern, not an outlier.

Why I built Turnaround Readiness (and how to use it without drama)

You've spotted it: the failure points I keep seeing in rescues are exactly what Turnaround Readiness checks are designed to address, intentionally.

It’s a six-domain early-warning and saveability assessment (Priorities, P&L control, Position, Pipeline, People, Power) with 42 evidence-based questions, weighted scoring, and benchmarks.

Turnaround Readiness structured input (left) and output (right). Example data

Use it in due diligence, as a quarterly early warning, at board meetings, or when a portfolio company “feels off.” It’s not a management fad; it maps where turnarounds fail in practice, and helps you catch issues before they become a surprise round.

Takeaways:

• Believe the base rate. 54% unplanned rounds and 39% distress aren’t moral judgments; they’re operating conditions. Build your playbook accordingly.

• Front-load the hard conversations. Bake soft-factor DD, scenario what-ifs, outside-in KPIs, and crisis-experienced advisors into the first term sheet.

• Run the check now, not after the “bridge.” If you want a fast, candid read, try Turnaround Readiness on one company. Worst case: you get a list and your money back. Best case: you avoid a funding email that starts with “unplanned.” (If the score is perfect, I’ll buy the coffee.)

Kenneth Dalsgaard | Interim & Fractional CEO | Advisor to Founders, Boards & Investors

eMotu Management | M: +45 22 36 78 62 | E: Kenneth@turnaroundreadiness.com | W: turnaroundreadiness.com