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Funding & Investmentimportant

Pre-Seed Funding

The earliest stage of startup funding, typically from founders, friends, family, or angels.

Example

A founder raises $250K from angels to build an MVP and get first 100 customers before raising seed.

Good Range

$100K-$500K for 10-20% equity

Warning Range

Giving up > 25% at pre-seed limits future raises

Complete Definition

Pre-seed funding is the earliest stage of external funding, usually raised to get from idea to MVP or early traction. It typically comes before institutional investors get involved.

Pre-Seed Characteristics

Amount

$50,000 - $500,000 typically Sometimes up to $1M in expensive markets

Sources

- Founders' savings - Friends and family - Angel investors - Pre-seed funds - Accelerators

Use of Funds

- Build MVP - Validate core hypothesis - Early customer acquisition - Small team salaries - Initial market testing

What's Expected

- Strong founding team - Clear problem identification - Initial solution concept - Market understanding - Vision and ambition

Pre-Seed vs Bootstrapping

Pre-seed provides capital to move faster, but comes with: - Equity dilution (10-20% typical) - Investor expectations - Pressure to raise more

Preparing for Pre-Seed

1. Strong founding team assembled 2. Problem well-understood 3. Solution hypothesis clear 4. Market sized and validated 5. Pitch deck ready 6. Financial projections basic

Used in:Funding RequirementsStartup Planning

Related Terms

Seed Funding
Early-stage funding to develop product, hire initial team, and achieve product-market fit.
Startup Valuation
The estimated worth of a startup, used to determine equity exchange in funding rounds.
Runway
The amount of time a company can operate before running out of cash.

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