Pre-Seed (Pre-Seed Funding)
The earliest stage of formal fundraising for startups, typically involving friends, family, and early angel investors.
Definition
Pre-seed funding is the initial capital raised by entrepreneurs to validate their business idea, conduct market research, and build a minimum viable product (MVP). It typically comes from personal savings, friends and family, or very early angel investors who believe in the founder's vision.
Typical Characteristics
- • Funding range: $10K - $500K typically
- • Investors: Friends, family, early angels
- • Stage: Idea validation and MVP development
- • Equity: 5-15% typically given to investors
- • Timeline: 6-12 months runway typically
- • Focus: Validate idea and build initial product
Real-World Example
Tech Startup: Founder raises $250K pre-seed from family, friends, and two angel investors
The funding covers initial development costs, market research, and basic living expenses while building the first version of their product.