A pre-seed startup is a company that is in the very early stages of development — typically the period between concept and the first formal round of venture capital funding or before the startup has received any external funding.
At the pre-seed stage, a startup often:
• Develops a business plan
• Defines a product or service
• Explores potential markets
• Develops financial models
• Identifies potential partners and collaborators
The pre-seed stage is typically bootstrapped, meaning the founders fund the venture with their own funds, plus any contributions from friends, family, and advisers. At this stage, startups usually focus on creating a functioning product to demonstrate the validity of their concept.
Pre-seed investing is an important pillar of the startup ecosystem, as these early funds can be instrumental in helping startups reach their full potential. It helps startups make the transition from a great idea to a viable business with the resources and expertise needed to turn a vision into reality. Pre-seed investors provide access to networks and resources that entrepreneurs may not otherwise have access to.