When running a backup of a Hyper-V VM you may run into this issue:
Selected writer 'Microsoft Hyper-V VSS Writer' is in failed state Status: 8 (VSS_WS_FAILED_AT_PREPARE_SNAPSHOT) - Writer Failure code: 0x800423f3
The above error requires further investigation. You need to check the Windows and Hyper-V logs as shown in this article and look deep into Hyper-V’s logs as well, in addition to the regular Windows Application and System logs. You’d want to look for VolSnap, VSS, and other errors and Disk Warnings.
It could be that the VM is vetoing the backup, too. To rule out this scenario, investigate the VM’s Event Viewer logs, too.
A common reason for the latter are outdated Hyper-V Integration Services.