2023 has proved to be challenging for many cash-conscious startups, especially those that anticipated raising venture capital in the first half of the year. As the Federal Reserve continues to increase interest rates in an effort to curb high inflation, the public market pullback, especially in the tech sector, and fears of a looming recession have made many investors hesitant to deploy new capital. Such fears have largely quelled the pandemic era of high valuations and easy access to cash for startups. During the “good times” of the past few years, many startups (including those with relatively limited track records) and their founders were able to access venture debt to bolster balance sheets and extend cash runways without the dilutive effect of raising investor money. However, the recent bank failures have significantly impacted the venture community, threatening to upend access to venture debt facilities. Although there are a few bright spots (like artificial intelligence and climate tech), with private company valuations falling and lower availability of venture debt, we expect startups will need to further preserve cash and resources to navigate the expected continued rocky terrain ahead. READ MORE