Updated · 2 min read
What is pre-seed funding?
Pre-seed funding explained: what it pays for, who the pre-seed investors are, how pre-seed differs from seed, and how to raise your first round.
Pre-seed funding is the earliest money a startup raises from outside investors, often before there is a finished product or any revenue. It pays for turning an idea into something customers can try.
What pre-seed money is for
- Building a first version of the product.
- Talking to customers and running early experiments.
- Covering founders' costs while they work on the company full time.
The goal is to reach the signals a seed investor needs: a working product, early users or pilots, and a clearer picture of the market.
Who invests at pre-seed
| Investor | What they bring |
|---|---|
| Friends and family | Speed and trust, usually small cheques |
| Angel investors | Experience and introductions, often from your industry |
| Angel networks and syndicates | Several angels investing together |
| Accelerators and incubators | A small investment plus a programme and demo day |
| Pre-seed funds | Institutional cheques designed for the very first round |
You can browse pre-seed investors by sector, including pre-seed AI and pre-seed fintech investors.
Pre-seed vs seed
At pre-seed, investors are mostly backing the founders and the idea. At seed, they expect early evidence: users, revenue or strong engagement. Pre-seed rounds are smaller, and are almost always raised on SAFEs or convertible notes rather than priced equity. See what is seed funding for the next step.
How to raise a pre-seed round
- Start with your network. Former colleagues, founders you know and angels in your industry are the most likely first cheques.
- Target investors who say they do pre-seed. Many funds that call themselves early-stage don't invest before revenue. Check each investor's stated stage focus on their profile.
- Show why you, why now. With little traction, your insight into the problem and your ability to build matter most.
- Keep the round simple. A SAFE with a sensible valuation cap keeps legal costs low and lets you close investors one at a time.
Expect a low hit rate at pre-seed. Founders commonly need many conversations for each yes, so a long, well-matched target list matters.
Questions
What is pre-seed funding?
Pre-seed funding is the earliest outside money a startup raises, often before it has a product or revenue. It pays for building a first version and testing it with customers.
Who are pre-seed investors?
Friends and family, angel investors, angel networks, accelerators and incubators, and venture funds that specialise in pre-seed.
What is the difference between pre-seed and seed?
Pre-seed investors back founders and an idea, usually before traction. Seed investors expect early evidence such as users or revenue. Pre-seed rounds are smaller and usually raised on SAFEs.
Find investors that match your stage, sector and region, with partner contacts.
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