What Life Sciences Companies Can Do When Funding Slows

In this article:

• Adapting to Investor Caution
• Planning for Multiple Scenarios
• Rethinking Capacity and Structures
• Upgrading What You Already Have
• Staying Ready for the Next Conversation
• How We Help

In biotech and life sciences sectors, capital is the engine that powers discovery, development, and scale. But cycles shift. Deals take longer. Investors ask more. And in the quiet between funding rounds, companies face a familiar question: how to move forward when the momentum stalls.

This is not a new challenge but one that requires steady recalibration. When capital becomes harder to secure, the most resilient companies are those that pause, reassess, and adjust. With careful planning and the right financial insight, it is possible to extend the runway, stay prepared for opportunity, and make decisions with clarity rather than urgency.

Adapting to Investor Caution

When investors grow more selective, companies often find they are not just pitching a vision but defending every line of a forecast. Timelines tighten. Budget assumptions face scrutiny. Proof of progress—backed by robust data and sound financials—takes center stage.

In these moments, leadership may need to revise financial models, sharpen their understanding of capital needs, and demonstrate the discipline to operate lean. This goes beyond storytelling. It calls for systems and controls that can stand up to investor diligence and internal decision-making alike.

AAFCPAs advises that clients revisit these models regularly, not just in response to a shift in sentiment but as part of a broader practice of staying funder-ready. Building flexibility into planning tools gives leadership options when market conditions change quickly, as they often do.

Planning for Multiple Scenarios

There is no fixed timeline for raising capital. Whether a round closes as expected or drifts into the next quarter, leadership needs a clear understanding of how different outcomes will affect operations. Scenario planning allows organizations to test these paths before they become real. Cash flow models built with multiple outcomes—early funding, late funding, no funding—help teams understand what can be sustained, what must be delayed, and where pivots may be needed. By integrating scenario planning with key decision levers such as hiring timelines, geographic expansion, and research funding, organizations can proactively assess the operational impact of each funding path. For example, a delayed round might trigger a hiring freeze in Q3, postpone opening a new lab facility, or defer critical research initiatives. This clarity enables leadership to make informed, timely decisions that align with both financial realities and strategic goals.

Many organizations use cloud-based planning tools to build and adjust these scenarios quickly. These platforms allow for multiple assumptions, real-time collaboration, and better visibility into burn rates and runway. AAFCPAs supports clients in selecting and implementing tools that align with their business model and stage of growth. For some, this may include financial planning and analysis (FP&A) software with built-in forecasting modules. For others, it may involve tailoring existing spreadsheets to reflect different revenue and expense drivers.

The goal is to move from uncertainty to informed decision-making—so that when funding timelines shift, the organization is ready.

Rethinking Capacity and Structures

A slower funding cycle can also be a practical time to reconsider how internal operations are structured. What support must remain in-house? What can be handled externally? And where can agility be gained?

Some companies turn to outsourced finance teams to maintain oversight without adding permanent headcount. Others seek fractional CFOs to step in during periods of transition or when financial leadership evolves. These flexible models allow organizations to preserve institutional knowledge and responsiveness without stretching lean teams too far.

A right-sized, readily available finance team—whether outsourced or fractional—can scale up or down quickly without the burden of added full time employees (FTEs). This model enables organizations to maintain continuity, preserve institutional knowledge, and stay responsive to shifting priorities. For example, during a delayed funding round, a fractional CFO can help recalibrate hiring plans, reassess lab expansion timelines, or reallocate research funding—all while keeping leadership aligned with real-time financial realities.

These flexible setups are especially valuable in life sciences, where funding cycles directly impact research velocity and operational scale. By embedding scenario planning into financial operations, companies can make confident decisions without overstretching lean teams.

It is also an opportunity to assess the organization’s infrastructure. When resources are tight, technology can help close the gap—reducing administrative burden, improving accuracy, and freeing staff to focus on higher-value work. Finance platforms with automation capabilities can take on routine tasks such as invoice processing, expense tracking, or financial reporting, allowing lean teams to operate more effectively.

AAFCPAs works with clients to identify where the right combination of people, process, and technology can increase efficiency without sacrificing control, oversight, or preparedness.

Upgrading What You Already Have

Modernization is not always about transformation. Sometimes it is about asking whether the tools in place still meet the needs of the company they serve. For life sciences organizations, this often means revisiting the finance stack to see where processes can be automated, where systems can be integrated, or where AI might ease routine tasks.

Many companies discover they can improve efficiency with targeted upgrades rather than full overhauls. AAFCPAs helps clients assess where Smart Automation—including AI and robotic process automation (RPA)—can create lift, reduce manual effort, and prepare systems for scale.

Staying Ready for the Next Conversation

Whether pursuing a strategic partnership or preparing for acquisition, companies are increasingly expected to present financials that are not only accurate but audit-ready. Diligence begins long before a term sheet is signed. The better prepared the data, the more efficient the process—and the more confident the conversation.

AAFCPAs helps life sciences organizations maintain that level of readiness at every stage. From clean documentation to indirect rate support and internal control reviews, our goal is to give companies the confidence to move forward—whether the next step is a raise, a merger, or simply staying the course.

How We Help

AAFCPAs advises life sciences companies from start-up through IPO, helping navigate funding delays, regulatory complexity, and strategic decision points. We support clients with scenario planning, cash flow forecasting, and financial modeling to prepare for multiple outcomes and respond with confidence.

When internal capacity is limited, our Outsourced Accounting & Fractional CFO solutions offer flexible support without permanent headcount. We also help improve efficiency, effectiveness, and internal control with business process optimization and smart automation, including AI and robotic process automation (RPA).

Our team brings sector-specific insight to each engagement, helping you stay financially resilient, funder-ready, and focused on long-term goals.

These insights were contributed by Destiny J. Flood, CPA, Partner, Commercial Outsourced Accounting & Fractional CFO, Nicole Zompa, CPA, Partner, and Ashleigh Marks, CPA, Consulting CFO. Questions? Reach out to our authors directly or your AAFCPAs partner. AAFCPAs offers a wealth of resources for those in the life sciences. Subscribe to get alerts and insights in your inbox.