A guide to pre-seed venture capital funding
Selecting a pre-seed VC and ensuring it’s a good match will take a lot of research in crafting a strategy and networking to get the pitch deck in front of the right people. It’s often said that partnering with an investment firm is like entering into a marriage, which is just to say that the relationship is legally binding and you have to make a lot of decisions together.
The average pre-seed round closes at just above $500k, according to DocSend. It’s a small yet meaningful sum that venture capital firms are willing to spend in the leap of faith on an idea or founder. Pre-seed VCs will consider the market opportunity, founder experience, product, and distribution. Though you may not have firm data available, your pre-seed pitch deck should reflect some indication of market-fit and a clear prototype or framework for the idea. Maybe you already have a revenue model and perhaps even the beginnings of a team.
VCs interested in pre-seed often have a strong model for supporting emerging companies, and may reduce risk by being able to steer a company towards success. As a founder or founding team, this may be an opportunity to receive an influx of capital and help bring an idea to fruition with the support of an experienced team. You will be introduced to the venture capital world and become part of an ecosystem with investors and other start-ups early on.
Selecting a VC and ensuring it’s a good match will take a lot of research in crafting a strategy and networking to get the pitch deck in front of the right people. It’s often said that partnering with an investment firm is like entering into a marriage, which is just to say that the relationship is legally binding and you have to make a lot of decisions together. And while you may feel like you are pitching the VC, any founder-investor relationship is a two-way street. Be sure to be transparent about expectations and ask any and all questions that come to mind. A company at a pre-seed stage is vulnerable so finding a compatible investor is going to make the journey towards viability that much smoother.
Explore our VC Directory
VCs Supporting Underrepresented Founders
These VC funds are seeking to increase social responsibility in start-ups, grow wealth in underserved communities, and support founders who are not traditionally represented in venture capital investment, i.e. anyone who is not a white, educated, straight, male. While the numbers are not hopeful (in 2021, female founders backed by VC was the lowest percentage it’s been since 2016 and both Black and Latinx founders received under 2% of total funding), VCs with a mission are trying to change this.
Muse Capital: Los Angeles, CA
Muse Capital is female-founded and focuses on the advancement of women’s health, education, parenting, fintech, media and entertainment, and more.
Harlem Capital: New York, NY
Harlem Capital is out to invest in 1,000 diverse founders over 20 years. Industry agnostic but generally does not invest in biotech, consumer products, cannabis, hardware or capital intensive businesses.
Visible Hands: Boston, MA
Visible Hands is on a mission to highlight and invest in the limitless potential of overlooked founders. We at Propel had the pleasure of welcoming General Partner Yasmin Cruz Ferrine for an interview where she walked through her fundraising advice and the different programs at Visible Hands.
The Fund: New York, NY
The Fund is a firm with a community-building ethos and a focus on mission-driven technology enabled companies.
BBG Ventures: New York, NY
BBG Ventures is a female-founded firm that invests in both B2C and B2B companies that have at least one female founder.
Unshackled: San Francisco, CA
Unshackled VC is building the best place for U.S. immigrants to launch a company, no matter their current work authorization - from student visas to being a new U.S. citizen. They review investment opportunities on a weekly basis so you're never too early or too late.
The Community Fund: New York, NY
The Community Fund boasts a diverse investment partner team oversees this fund’s work with community-driven companies.
Impact America Fund: San Francisco, CA
Impact America Fund looks to invest early in tech-driven businesses that create new frameworks of ownership and opportunity within marginalized communities, prioritizing those with founders who have direct knowledge of the communities, systems, and problems being addressed.
Pride Fund: Columbus, OH
Pride Fund prioritizes under-serviced communities in venture capitals, including women, BIPOC, and the LGBTQIA communities.
Leadout Capital: Palo Alto, CA
Leadout Capital is a female-founded and female-led firm that backs resilient founders who are building venture scale businesses for underserved and large end markets.
Rogue Women’s Fund: Portland, OR
RWF invests in the women-led tech startups across the US.
Gold House Ventures: San Francisco, CA
Gold House is a non-profit formed to advance the interests — and safety — of people of Asian and Pacific Islander descent in the U.S. They recently closed a debut $30 million venture fund. Gold Rush is its accelerator program, which has begun to formally invest $100,000 for 5% of a startup team’s equity.
East Coast-based VCs
There are stereotypes that VCs headquartered along the East Coast value downside items in term sheet negotiations. Knowing a few of these offices ourselves, we’d take the stereotypes with a pinch of salt. Scroll for some stand-out firms you can explore.
Newark Venture Partners: Newark, NJ
Newark Venture Partners focuses on companies developing B2B technology.
Red Sea Ventures: New York, NY
Red Sea Ventures focuses on both B2C and B2B companies.
NextView Ventures: Boston, MA
Another firm where we’re proud to have Propel members operating and being supported with investment, NextView Ventures are hands-on investors working with founding teams at the earliest stages. Running small deals and expansive platform offerings, they are focused on meeting the needs your team has in the early days.
January Ventures: Boston, MA
January Ventures focuses on software businesses building the future of work and health, with an emphasis on highly-scalable companies.
Blue Collective: Brooklyn, NY
Blue Collective is founder-driven and focuses on B2B and SaaS companies.
The Venture City: Miami, FL
The Venture City is female-founded and focuses on both B2B and B2C.
Maine Venture Fund: Newport, Maine
Maine Venture Fund focuses on companies that have the potential for significant growth and impact in Maine.
Birchmere Ventures: Pittsburgh, PA
Birchmere Ventures seeks to support founders overlooked for not being located on a coast.
Charge: New York, NY
Charge is solely pre-seed/seed with a side research project that seeks to illuminate and mitigate bias in early-stage financing.
First Star: Boston, MA
First Star focuses on data-heavy companies and hard tech.
Outlander VC: Atlanta, GA
Outlander VC prioritizes tech companies with a vision to solve global issues.
West Coast-based VCs
The traditional home of startup land, there is undoubtedly more activity along the West Coast and specifically in Silicon Valley when measuring firms by capital under management or the volume of deals made for example. There continues to be a stronger appetite among West Coast VCs for taking risks on earlier stage startups. Browse our roundup of firms to consider.
Index Ventures: San Francisco, CA
Index Ventures has global reach and works with companies that improve and transform human life and economic activities through technology.
Contrary: San Francisco, CA
Backed by iconic founders from Tesla, Airbnb, Facebook, and more, Contrary is a venture fund that identifies and invests in the world’s top talent.
Accel: Palo Alto, CA
With 35 years of investing experience, you’ll recognize Accel as the earliest backers of companies like Atlassian, Etsy, Facebook, and more.
Zeno Ventures: San Francisco, CA
Zeno Ventures’ investments range from frontier technologies to digital transformation of antiquated industries.
First Row Partners: Seattle, WA
Investors in a company founded by a Propel member, First Row Partners funds early stage startups ready for a big leap forward. They invest in solving meaningful human problems with technology and typically focus on software.
One World: Palo Alto, CA
One World supports early stage, for-profit social impact startups.
BITKRAFT Ventures: San Francisco, CA
Bitkraft Ventures focuses on companies creating gaming, web3, and immersive technology.
First Round Capital: San Francisco, CA
First Round Capital is aptly named, this firm seeks to support emerging companies with investments and guidance around early decision making.
Baroda Ventures: Los Angeles, CA
Baroda Ventures invests in consumer internet, e-commerce, mobile, SaaS, blockchain, and digital media industries.
Frontier Venture Capital: Santa Monica, CA
Frontier Venture Capital supports innovative technologies to amplify joy, well-being, safety and productivity around the globe.
Crosscut Ventures: Los Angeles, CA
Crosscut Ventures is the largest seed-stage venture capital firm in LA with a focus on leadership development, coaching, and founder mental health.
Hustle Fund: San Carlos, CA
The Hustle Fund team bring their own experiences as founders in supporting early seed companies.
Afore Capital: San Francisco, CA
Afore Capital's motto is no company is too early.
United Kingdom-based VCs
With Europe as the Fintech capital of startup land and exciting funds ramp up, we've curated a few firms you should be aware of in the UK.
Hoxton Ventures: London, UK
Hoxton Ventures focuses on startups seeking inventing new market categories or transforming existing industries, but purposely does not define a theme.
Balderton Capital: London, UK
Balderton Capital is an established BC working exclusively with European companies.
Forward Partners: London, UK
Forward Partners seeks to help companies build, the firm is currently focused on Applied AI, eCommerce, and marketplace.
Playfair Capital: London, UK
Playfair Capital invests early and broadly, including in deep tech, SaaS, marketplaces and B2B companies.
Passion Capital: London, UK
Passion Capital supports digital media/technology companies.
Seedcamp: London, UK
Seedcamp seeks to invest at an early stage to provide support founders in making early decisions, growing the team, and strategic connections.
Frontline Ventures: London, UK
Frontline Seed is a fund for B2B early-stage businesses with global ambitions.
Crane Venture Partners: London, UK
Crane Venture Partners invests in companies working in Open Source, Data First, Machine Learned, Creator Driven technologies.
Walking Ventures: London, UK
Walking Ventures works with startups working in high-technology and bio-tech.
Fuel Ventures: London, UK
Fuel Ventures focuses on building proven business models in the online and mobile space that has the ability to scale quickly and have international growth potential.
VCs Investing in DTC
Direct-to-Consumer brands soared in the early days of the pandemic and haven’t slowed down much since then. While many existing companies may face questions about scaling operations, emerging brands are in a plum position for building a consumer base and these VCs are here to help make that happen.
Bullish: New York, NY
Bullish can support pre-seed as both an investment firm and a brand agency
Human Ventures: New York, NY
Human Ventures supports businesses that deliver products that are ‘need to haves’ not just ‘nice to haves’ and provide solutions to underserved communities.
Forerunner Ventures: San Francisco, CA
Forerunner Ventures is a firm specializing in understanding the consumer of today to anticipate where they’ll be tomorrow.
Intonation Ventures: New York, NY
Intonation Ventures is a product centric fund that invests at the intersection of the physical and digital world.
Melitas Ventures: New York, NY
Melitas Ventures supports food and beverage brands.
Monogram Capital: Los Angeles, CA
Monogram Capital is a firm prioritizing innovative consumer brands with demonstrated customer followings and differentiated value propositions. Categories include apparel & accessories, beauty & personal care, pets, consumer healthcare, food and beverage, and restaurants.
Notation Capital: Brooklyn, NY
Notation Capital seeks to work with product-obsessed teams from day zero.
Shrug: San Fransisco, CA
Shrug focuses on consumer-based startups.
Slow Ventures: San Fransisco, CA
Slow Ventures promotes great founders with companies in creative “consumer-ish” categories.
Have you had any experience in raising pre-seed? If so - what advice do you have to share? Connect with us a Propel to share any experiences you’ve had with VCs at this early stage.
If you enjoyed this, you might enjoy learning why Eli Halliwell avoided institutional investors for several years and why he later changed his mind.