As investors become increasingly concerned with a potential recession on the horizon it is important to look at opportunities that provide some downside protection in a recession. A recent PitchBook report highlights food & beverage, pet products, aftermarket automotive and healthcare IT as sectors which have typically shown some resiliency in a downturn.
Similarly, after a series of IPO missteps in 2019 (including WeWork), a likely recession has investors more cautious with valuations. Entrepreneurs are going to have to rely more on fundamentally sound finances like revenue and cash flow and less on irrational exuberance as they negotiate equity rounds.
As 2019 winds down, there is much uncertainty across both economies and markets worldwide as to what 2020 may bring, given a bewildering swirl of contradictory macroeconomic indicators, political disputes and more. One of the most hotly discussed topics is the potential for a recession, with the memory of the Great Recession still painfully fresh in the minds of many.