The Capital Cycle Nobody Times: What Four Industries Teach the Same Lesson

Every industry pretends its capital cycle is unique. Mining CEOs talk about commodity cycles. SaaS founders talk about ARR multiples. Biotech founders talk about clinical milestones. MedTech operators talk about acquisition windows. Four different vocabularies, one underlying mechanic. What operators actually learn is that you cannot time the cycle. You can only decide which version of it you are going to survive. · Juan Vegarra

I have been on both sides of two full capital cycles in two different industries. I ran a public mining company through the commodity supercycle and its collapse. I now run finance and commercial operations for a pre-commercial medical device company navigating an entirely different capital environment. The vocabulary changed. The mechanic did not.

Founders who have only lived through one cycle tend to believe their industry is fundamentally different. They point to the specific dynamics that seem to distinguish their sector from the boom-and-bust patterns of everyone else. Mining CEOs talk about commodity prices and drill results. SaaS founders talk about net revenue retention and the Rule of 40. Biotech operators talk about pivotal readouts and FDA calendars. MedTech commercial teams talk about hospital contract cycles and acquirer strategy shifts. Each vocabulary is real. Each is also a way of telling yourself that the mechanic operating on your specific company is not the same mechanic that has operated on every other capital-intensive industry throughout modern financial history.

The mechanic is straightforward. Capital abundance chases stories that require little scrutiny. Capital scarcity punishes assumptions that were never stress-tested. The specific stories change from decade to decade, and the specific assumptions look different depending on the industry. The underlying dynamic does not.

Mining, 2010 to 2016

When I was leading a public mining company in the early 2010s, the world had convinced itself that Chinese commodity demand would continue indefinitely. Global mineral exploration budgets reached an all-time high of $20.5 billion in 2012.^[1] The top 100 junior mining companies on the TSX Venture Exchange collectively held $2.3 billion in cash at the 2011 peak.^[2] Forty new mining companies were being admitted to the TSX or TSX-V per quarter during the peak years of 2010 and 2011. Capital was chasing stories, and the stories did not require rigor. If your project had a compelling geological narrative and a management team that could tell it, you could raise money. That was the ecosystem.

What happened next is what always happens. In 2012 alone, the market capitalization of the TSX-V top 100 mining companies fell 43 percent from the previous year.^[2] Equity financing for the top 100 dropped from $2.7 billion in 2011 to $1.6 billion in 2012, a 41 percent decline in a single year. By 2015, the top 100 juniors could only raise $515 million in aggregate equity financing, and 86 percent of that was captured by just 15 companies.^[3] Aggregate cash held by the top 100 fell from $2.3 billion at peak to $700 million by the end of 2015. Mining IPO activity on the TSX went from 42 per year in 2011 to 7 in 2013 to 2 in 2014.^[4]

The companies that survived shared two characteristics. They had positioned for the downside during the peak, when nobody was rewarding them for it. And they had management teams who understood that a good story raised on the way up would need to be defended on the way down, in front of investors who no longer wanted to hear it.

SaaS, 2020 to 2024

The exact same dynamic played out in software with a different vocabulary. The median public SaaS multiple peaked at 18.6 times forward revenue in late 2021.^[5] High-growth SaaS businesses were trading at 20 to 40 times forward revenue in the public markets, and private venture rounds were pricing at similar multiples.^[6] Founders raising at those multiples believed the multiples reflected the fundamentals of their business. What the multiples actually reflected was the price of capital combined with a narrative that recurring revenue was structurally different from every previous form of revenue that had traded at lower multiples.

By the end of 2022, public SaaS multiples had compressed to 5 to 8 times forward revenue for most businesses.^[6] The correction was severe and fast. By 2023 the median had fallen to around 3.7 times revenue in private M&A transactions, and by 2024 it reached a low of 2.9 times.^[7] That represents a compression of more than 80 percent from peak to trough on the same fundamentals. Companies that had raised at 30 times ARR in 2021 discovered that the market would only pay 3 to 5 times ARR for the same business two years later.

The founders who survived shared the same two characteristics as the mining survivors. They had structured their burn assuming the peak would end, and they had built enough optionality into their financing that they could raise at 5x when the market would no longer pay 20x. The ones who did not survive had built their operating model around the assumption that the peak multiples were the new normal.

Biotech, 2020 to 2023

The biotech vocabulary was different again. Seventy-eight biotechs went public in 2020, an all-time record and a 77 percent increase over 2019.^[8] Combined IPO gross proceeds for biotech in 2020 hit $12 billion, up from $5 billion the year before. The 2020 US biotech IPO class averaged an 80 percent return from offering price. The 2021 class extended the run, with 78 more offerings raising nearly $14 billion.^[9]

Nearly 80 percent of the 2021 biotech IPO class finished the year trading below their offering prices.^[9] The average biotech IPO was down 22 percent in 2021 compared to gains of 10 to 100 percent between 2016 and 2020. By 2022, total shareholder return for the median company in the NASDAQ Biotechnology Index was negative 43 percent for the year and negative 58 percent cumulative from the start of 2021.^[10] The IPO market saw a 79 percent decline in completed biotech IPOs from 2021 to 2022.^[11] By December 2022, 21 percent of pre-commercial biotech companies on the IBB index were trading below the cash sitting on their balance sheets, and 119 biotech and pharma companies had executed layoffs in 2022.

Same mechanic. Different vocabulary. Different operating models get destroyed, but the reason they get destroyed is the same: assumptions about capital availability that were only ever true at the top of the cycle.

MedTech, 2024 to now

MedTech M&A is currently in what looks like the abundance phase of a different cycle. Roughly $36.5 billion in disclosed MedTech acquisitions in the first half of 2026 alone, according to PwC.^[12] Boston Scientific paying $14.5 billion for Penumbra. Abbott closing $21 billion for Exact Sciences. Danaher agreeing to acquire Masimo. Stryker paying up to $835 million for Amplitude Vascular Systems. Medtronic completing CathWorks for $585 million and Scientia Vascular for $550 million. Johnson & Johnson buying Atraverse Medical. The narrative is that strategic acquirers have rediscovered MedTech and will continue to deploy premium capital into the sector for the foreseeable future. Medtronic CEO Geoff Martha stated on the Q3 fiscal 2026 earnings call that the company plans up to two or three billion dollars more of M&A over the next 12 to 18 months.^[13]

Every MedTech founder pitching a Series B or C today has this environment as their operating assumption. Premium acquisitions at 5 to 8 times revenue. Strategic buyers with capital to deploy. A robust exit market. That is the current story. The story is real right now. The question is not whether it is real. The question is what happens to founders who structure their capital plan, their runway assumptions, and their milestone spending around the assumption that the story continues for another 36 months.

I do not know when the MedTech cycle turns. Nobody does. What I know from having lived through the mining cycle and watched two others from the investor seat is that the founders who survive the turn are the ones who structured for it during the peak.

What the mechanic actually is

Capital abundance chases stories that require little scrutiny. The scrutiny that does not happen at the top is the scrutiny that shows up at the bottom, when the same investors and acquirers who took your story on faith at 30 times revenue want to see the underlying unit economics at 3 times revenue. The gap between the story-based valuation and the fundamentals-based valuation is the gap that most founders never model, because at the peak nobody is asking them to.

What survives across cycles is discipline that was installed when discipline was not the fashionable answer. Working capital tight enough to survive 18 months of no new capital. Board reporting rigorous enough that when public markets scrutiny arrives it does not require six weeks of retroactive reconstruction. Founder equity structures that acknowledge dilution mathematics rather than pretending the round after the current round will be at a higher price. Milestone plans that produce hard evidence rather than narrative progress.

None of that is unique to any one industry. All of it is countercyclical. Which is why it is so hard to install at the top of the cycle, when nobody is rewarding it, and so obviously necessary at the bottom, when it is too late.

What CEOs learn across two cycles

You learn to distinguish signal from vocabulary. Every industry produces its own way of describing why this time is different. Mining had the Chinese demand narrative. SaaS had the recurring-revenue-is-structurally-different narrative. Biotech had the platform-technology narrative. MedTech currently has the AI-plus-hardware narrative. Each narrative captures a real thing. None of them changes the underlying mechanic that connects capital availability to eventual survival.

You also learn to make one specific commitment during the peak: build a capital plan that survives the version of the future where the peak was the peak. If the story continues, you still win, because your operational discipline compounds. If the story reverses, you survive, because you never took the operational shortcuts that only work in the abundance phase. That is the seat you want to be sitting in when the cycle turns, regardless of which industry you are running.

The founders who cannot install this discipline share one specific characteristic: they have only lived through one cycle, and they believe they have lived through everything. The founders who can install it share the opposite characteristic. They have lived through more than one cycle, or they have been advised by someone who has, and they know the vocabulary changes but the mechanic does not.

That is what I mean when I say the capital cycle is the one nobody times. You do not time it. You survive it. And the operators who survive are the ones who paid attention to the last one that looked nothing like this one.

Juan Vegarra is the author of An Outsider’s Playbook (2026). He was Chairman and CEO of Vena Resources through the mining commodity cycle of 2010 to 2015 and is currently CRO and acting CFO at a pre-commercial medical device company. More essays · Free toolkits · Advisory · Write me