# What was it like to raise VC funding in 2023?

Author:

Kevin Dowd

Published date:

December 18, 2023

Every founder has a different story. We spoke to three of them about what they’ve seen, heard, and experienced on the fundraising trail in 2023.

## Summary of Insights

For a founder, convincing venture capitalists to invest millions of dollars into your startup is always a challenging task. Amid the venture downturn that’s dominated the market in 2023, it’s gotten even harder.

Private companies on Carta raised 3,836 primary funding rounds through the first nine months of the year, a 31% decline compared to the first nine months of 2022. In Q3, startups closed just 1,080 new rounds, the lowest quarterly figure since 2018, when the population of private companies on Carta was much smaller.

Today, venture capitalists are more cautious than they were in 2021. They’re also looking for different things in their prospective investments, focusing on fundamentals like revenue and profitability. Startups that were built to thrive in an era of soaring valuations and near-zero interest rates have had to adapt to a much tighter funding environment.

## Matic’s Series B extension

Madick knows that he’s one of the lucky ones. His company’s Series B extension this fall was a success, bringing on new capital to work on automation and other improvements for consumers.

Matic is no stranger to market chaos. The company raised its initial Series B in the first half of 2020, during the onset of the pandemic, adapting quickly to changing market conditions.

## Halo AI’s revenue conundrum

Dina Ghobrial is a co-founder and CEO at Halo AI, initially funding the company with their own capital. This year, they decided to try raising their first outside investment, but faced challenges.

Despite speaking to more than 100 investors, many showed interest but none were prepared to invest. The common feedback was that VCs wanted to see revenue and customers before investing, leading Ghobrial to focus on acquiring customers first.

## Revefi’s waiting game

Revefi announced a $10.5 million seed deal in August 2023, even though it technically raised that capital back in 2021 but delayed the announcement until this year.

Co-founders Sanjay Agrawal and Shashank Gupta emphasized the need for efficiency and a cautious approach in fundraising, suggesting they might not rush to raise more cash in a market that's constantly evolving.