Don't miss the next pre-seed unicorn from the UK!
Pre-seed startups are difficult to define. At Startupmag we use the amount of their latest fundraise as the criteria. Any startups that raise less than £1M are pre-seed.
If startups have raised funds it’s easy, but what if startups haven’t raised funds yet?
Without a recent funding round, 'pre-seed startups' can also refer to early-stage companies that are in the very initial phases of development, typically before they have secured significant external funding from traditional venture capitalists.
In terms of actual business, being pre-seed generally means you have an idea that you’re trying to validate. You may be building an MVP and you’re trying to get as many stats as possible that validate your product market-fit.
The startups in the above list have all raised just under £1M and we will be watching them closely as they move towards seed stages.
The term 'pre-seed' has gained popularity to distinguish the very early stages of startup development, often before a formal seed funding round.
During the pre-seed phase, founders typically focus on proving the viability of their business concept, developing a prototype, and gaining initial traction.
You may not have much traction at this stage but you will need to prepare a pre-seed pitch deck to show your plan to potential investors.
The best pitch decks generally have around 12-15 slides. And I tend to split these slides into 2 big sections:
section 1: What you are building and why you think it’s a good idea?
section 2: Why are you the right people to make this work?
Funding at this stage may come from personal savings, angel investors, pre-seed VC investors or small grants. The goal is to reach a point where the startup is attractive to seed investors who can provide more substantial funding for further growth. And that is exactly what you can showcase in your pitch deck.
The funding stages for startups generally progress in the following order:
Pre-seed: At this stage, founders may use personal savings or funds from friends and family to get their idea off the ground. The goal is often to develop a prototype or proof of concept.
Seed: Seed funding is the next stage and usually involves external investors providing capital in exchange for equity. This funding helps startups expand and refine their products, conduct further market research, and scale their operations.
Series A, B, C, etc.: These subsequent funding rounds involve larger sums of money and are intended to help the startup grow, enter new markets, and achieve greater scalability. Each round corresponds to a different stage of growth.