Pre-seed round

How it works

Pre-seed has become its own stage in the last decade as round sizes have grown. A pre-seed is usually founders + a small group of angels and pre-seed-focused funds, raised against a prototype, a deck, and a strong team. The typical check is $50K–$250K from each participant, and total round size is $500K–$2M.

Related terms

• Seed round
  A seed round is the first priced (or SAFE) financing of a startup, typically $1M–$5M raised to find product-market fit.
• SAFE (Simple Agreement for Future Equity)
  A SAFE is a short investment contract that gives an investor the right to receive shares in a future priced round, without setting a valuation today.
• Valuation cap
  A valuation cap is the maximum valuation at which an early investment (SAFE or convertible note) will convert into equity, protecting the investor from being diluted if the company's valuation skyrockets.