To Fundraise or Not To Fundraise in 2023?
The year 2023 has unfurled, sparking various reactions and conversations within the startup ecosystem. I find myself in the thick of it all — as a startup adviser, an investor, and most importantly, a keen observer of the unfolding narrative.
Photo by Zhifei Zhou on Unsplash
2023 Industry Trends

First, let’s take a look at the bigger picture. The ‘VC Funding In CEE Report — 1Q 2023’ reveals a significant 60% year-on-year drop in investments in the CEE region and a 53% decrease in global VC transactions. The report urges us to consider these figures not as doom and gloom but as an invitation to refocus on innovation, responsible scaling, and long-term value creation.

Investor’s View on Fundraising in 2023

To provide a more nuanced perspective, I recently surveyed a range of investors on their investment intentions for 2023 and their pre-seed investment criteria. Additionally, I talked personally to numerous investors in the past months. While 42% of investors reported investing less compared to 2022, most are maintaining their investment activity levels or planning to invest in startups. The key considerations include the founders’ experience, market size and potential, the uniqueness of the product or service, and evidence of traction.

So, what does this all mean for you as a founder in 2023?

Here are some actionable insights:

  1. Validated Value Proposition: A validated value proposition emerges as a critical factor across both the report and the survey. Investors want clear market validation, customer engagement, or user traction. Thus, spend time validating and iterating your value proposition and engaging with potential customers, investors, and partners.
  2. Beware of Red Flags: Pay attention to potential deterrents for investors, such as a lack of an experienced founding team, unclear business models, high burn rates, and insufficient traction. Seek to address these issues proactively in your startup.
  3. Right Time for Pre-seed Rounds: The “right” time varies, but most investors suggest having at least an MVP and some traction or market validation. However, some investors are open to investing when a viable business idea is presented.
  4. 2023: An Opportunity for Growth: View the current year as a challenging period and a time of refinement and growth. The most resilient ventures often emerge from periods of uncertainty.
  5. Remember Your Why: A recurring piece of advice from investors is “Know why you’re doing what you’re doing.” This should be your guiding principle when deciding on fundraising in 2023.
  6. Partner with the Right Investors: Fundraising is not only about securing the necessary funds but also about partnering with investors who believe in your vision and can add value beyond the capital.

Lastly, it’s important to remember that despite the shift in market dynamics, sectors such as E-commerce, Gaming, Fintech, AI, Analytics, and SaaS are still attracting investor attention.

There is light at the end of the tunnel: Here’s to a year of seizing opportunities, navigating challenges, and growing resiliently. After all, it’s not just about fundraising; it’s about building a sustainable business that solves real problems and creates a meaningful impact.
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JUNE, 13 / 2023

Text author: Boris Manhart
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