Only the Lean Survive: It’s Back to the Gym for Operators

We’re in the middle of a full-blown capital markets collapse—and the latest data from Viridian Capital Advisors makes it painfully clear. As of the first twelve weeks of 2025, just $275.5 million has been raised globally, marking a 40% drop from the already anemic numbers of 2024. That’s not just a dip—it’s a confirmation that the capital freeze has gone from bad to brutal. For anyone trying to raise funds right now, the writing’s on the wall: this is one of the hardest environments the industry has ever seen.

Hot Spots

Virtually all the action is now happening in the U.S., which accounted for 82.1% of all capital raised so far this year. Canada, once a dominant player, has all but flatlined. Its capital markets are in a death spiral, dragged down by years of oversupply, market missteps, and shattered investor confidence. The rest of the world? Even quieter. Capital raises outside of North America are almost nonexistent, reflecting just how far global enthusiasm has cooled.

Heavy Weights

In the U.S., debt is the only game left to play. Debt raises in Q1 2025 surged 161.7% year-over-year, totaling $190 million. But that number is misleading—because $130 million of it came from just two companies: Chicago Atlantic ($100M) and XS Financial ($30M). That leaves only about $60 million in debt financing available for the rest of the industry—hardly enough to sustain the thousands of operators still scrambling for liquidity.

Dry Season

The implications are clear and harsh. Cash flow has become the north star. If you’re not profitable, you’re likely already underwater. Equity raises are dead, and debt is being hoarded by institutional players with pristine books and deep connections. For everyone else, survival now depends on cost-cutting, operational efficiency, and staying as lean as possible. Ambitious expansion plans are liabilities in this climate; investors want discipline, not dreams.

Conclusion

We’re not just in a downturn—we’re in a full reset. This market is punishing the over-leveraged, overextended, and overhyped. What it’s rewarding is stability, grit, and an ability to survive when the money stops flowing. Whether that nuclear winter thaws in the coming year remains to be seen. But one thing is certain: the grind has never been more real.