Guide to pre-seed funding for early-stage start ups

If you’re taking the first steps towards starting your own business, it’s important to think about funding.

Every startup needs an injection of capital from somewhere, even if just from friends, family and supporters. This is the money you’ll need to turn concepts into prototype products and to put the basic elements in place for a functioning business.

In this guide, we’ll run through everything you need to know about pre-seed funding for early-stage startups. This includes what pre-seed funding is, how it’s different to other types of funding and crucially, some tips on how to get it.

And while you’re exploring financial options for your startup, make sure to check out the Wise Business account. It’s ideal for companies of all sizes, especially if you have big ambitions to one day go global.

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What is pre-seed funding?

Pre-seed funding is the very earliest stage of funding for a startup company. It is often followed by the following funding rounds:

1. Seed funding
2. Series A funding
3. Series B funding
4. Series C funding
5. Series D funding

At this very preliminary stage, it’s more about investing in a great business idea or a concept, rather than the business itself. Anyone committing funds to a startup at this stage - whether a family member or institutional investor - will often be helping to develop products or services. The funds can be used to build or advance prototypes, carry out market research or hire the company’s first few team members.

It can also help to put in place the essential building blocks of the business, including incorporation, buying equipment, taking out insurance and covering legal fees.

The ultimate goal is to prove the viability of the business idea, alongside building what is known as a minimum viable product (MVP).

Typical pre-seed investment amounts

So how much is typically invested at the pre-seed stage of funding? It varies considerably between startups, but is on average around $50,000 to $200,000 USD (£37,300 to £150,000 in GBP).¹

This is considerably less than later rounds of funding. For example, seed funding rounds typically raise up to $2 million USD (approx £1.5 million in GBP).

What’s the difference between pre-seed funding and seed funding?

Pre-seed funding usually happens before any formal or institutional rounds of investment, which start with the seed funding round. Due diligence checks tend to be very light touch, if they’re carried out at all.

Pre-seed investors tend to be the founder’s friends and family, angel investors or crowdfunder supporters, whereas seed round investors are often venture capital firms.

And unlike the seeding round, investors aren’t necessarily looking for startups with high growth potential or which have gained traction. It’s often the idea that matters, along with a charismatic, persuasive and driven founder.

Another key difference between pre-seed and seed funding is the amount typically invested. As we’ve already discussed, funding amounts tend to be much lower at the pre-seed stage.

Types of pre-seed funding

There are a few different types of pre-seed funding, or rather - a few different sources of investment. Early-stage startups are often able to raise capital from a number of types of investor, such as:

• Friends and family - any startups take their first steps with help from their personal network. These are people who have confidence in the founder, rather than knowing much about the industry or even the product.
• Crowdfunding campaigns - this form of fundraising can offer multiple benefits, including raising capital, building a community and increasing awareness of the product or service. Crowdfunding can also be a vital first test of demand, as well as helping startups collect early data into their target market.
• Angel investors or syndicates - angel investors are high-net-worth individuals who invest their own money into an idea or business, and they usually focus on pre-seed and seed funding. Syndicates are investors who combine their resources to make larger investments in a company, usually through special purpose vehicles (SPVs).
• Accelerators and incubators- these are programs specially designed to help startups grow, offering support and access to funding - sometimes in exchange for equity.
• Venture capital (VC) firms - while many VC investors focus on providing seed funding, some specialise in pre-seed investment.

Tips for getting pre-seed funding for startups

Now we come to the crucial part - how startup founders can go about securing pre-seed funding. It can be difficult, as you’ll be competing with thousands of other entrepreneurs all with great business ideas and a need for early-stage funding.

Here are some tips to help give yourself the best possible chance of investment:

Make sure you’re ready

Before you do anything else, you need to make sure that pre-seed funding is right for you - and that you’re ready for it.

Make sure you have the following in place:

• A minimum viable product (MVP)- this is an early form of your startup's product or service, which offers investors a tangible glimpse of what your company could achieve. There should be demand for it, and it should be a good fit for your target market.
• Evidence of initial interest from customers- for example, a previous successful crowdfunding campaign could demonstrate that there is some demand and interest in your products or service.
• A founding team with knowledge and expertise in your chosen industry - if not, you may still be able to win over investors with strong leadership and communication skills, enthusiasm and good preparation.
• A compelling pitch deck - we’ll look at this in more detail next.

Create a compelling pitch deck

The most crucial thing you’ll need as a startup founder looking for investment is a persuasive and professional pitch deck.

This lets investors know precisely what they’re putting their money into. It concisely and impactfully showcases your product, company and target market. Most importantly, it demonstrates the growth potential of your business.

You might want to produce multiple versions of your pitch deck, tailored to different types of investors.

Do your research and develop a strategy

There are a number of potential routes you can take to secure the capital needed to take your startup further. And there’s nothing stopping you taking advantage of more than one of these.

It all starts with researching the fundraising landscape, to identify opportunities and potential investors. If you’re able to drum up local support or tap into a particular community, you might want to launch a crowdfunding campaign.

Alternatively, you can consider applying for an accelerator or incubator scheme, choosing either a national or regional programme (if available).

You can also attend networking events to connect with potential investors, and start reaching out to find out exactly what they’re looking for in an investment project.

Connect with fellow founders

A great way to identify funding opportunities is to get in touch with fellow startup founders, to find out how and where they secured early-stage funding. If the startup is a success, it only makes sense to follow its example.

You may be able to get tactical advice on the next steps, or even introductions to potential investors. If nothing else, you’ll be starting to build a network.

Grow your company and go global with Wise Business

While you’re researching funding options for your startup, it’s also worth making sure you’re set up with the right business account. Open a Wise Business account and you can hold and exchange 40+ currencies at once.

You can send fast, secure payments to 140+ countries, and get account details to get paid in 8+ currencies like a local.

Whenever you need to send, spend or exchange foreign currencies, you’ll benefit from the mid-market exchange rate, with low, transparent fees.

You’ll also benefit from all of these features with Wise Business:

• No ongoing fees, minimum balance requirements or foreign transaction fees
• Debit and expense cards for you and your team, which you can use in 150+ countries
• Multi-user access for team members, with ways to control and manage permissions
• Pay up to 1,000 people at once with the Wise batch payments feature
• Integrate with your favourite cloud accounting solutions
• Use the powerful Wise API for automation and streamlining workflow
• Take advantage of Wise Interest to make your funds work harder when you’re not using them (capital at risk).

With a truly global account, you’ll be all set to grow your business worldwide.

Capital at risk. Growth not guaranteed. Wise Assets UK Ltd is authorised and regulated by the Financial Conduct Authority with registration number 839689. When facilitating access to Wise investment products, Wise Payments Ltd acts as an Introducer Appointed Representative of Wise Assets UK Ltd. Please be aware that we do not offer investment advice, and you may be liable for taxes on any earnings. If you’re uncertain, we urge you to seek professional advice. To find out more about the Funds, visit our website.

Sources used for this article:

Sources checked on 29-April-2025