In the Market-Inside a startup’s struggle in a higher-for-longer world

investing.com:

By Paritosh Bansal

(Reuters) — Things were looking up for Tractiv in January, when the data tracking software startup was on the cusp of a deal with Marvel Studios. Now, it is on the brink, with just enough cash left to make it to Thanksgiving.

The tale of Tractiv's dramatic reversal in fortunes is emblematic of the times. Marvel, a unit of Walt Disney (NYSE:DIS), initially planned to use Tractiv's software in a post-production process, documents show. But layoffs at Disney and the Hollywood strikes threw a wrench in the works.

At the same time, a pullback in venture capital due to higher interest rates meant funding dried up. Drew Orsinger, Tractiv's co-founder and CEO, said he needs $600,000 to $700,000 to keep going for a few more months, time he needs for Hollywood to return to work and for talks with other potential customers to get traction.

He's not sure he will succeed. «We are not throwing in the towel, but we are struggling,» said Orsinger, 49.

Disney and Marvel declined to comment.

Tractiv's tribulations are detailed here based on interviews with nearly half a dozen executives and investors familiar with the startup and a review of company documents. They provide rare, sometimes blow-by-blow insight into the hardship facing startups, key drivers of American innovation.

Many of Tractiv's challenges are typical of an early-stage company as well as a consequence of risks it took, such as trying to break into a clubby industry outside its area of expertise. Nevertheless, its experience also shows how a momentous shift over the past year to higher interest rates has left startups more vulnerable to external shocks.

A shakeout in the industry may eventually prove to be cathartic. But for now, more pain is