Securing pre-seed funding is one of the first and most crucial steps in building a startup. This stage of funding helps validate ideas, develop prototypes, and achieve initial market traction, making it a launchpad for future investment rounds. In 2023 alone, early-stage startups in India raised over $1 billion in pre-seed and seed funding, highlighting the growing interest of investors in high-potential startups.
However, many early-stage startups struggle to attract pre-seed investors due to a lack of market validation, weak investor networks, or unclear business models. With 90% of startups failing within the first five years, securing pre-seed capital the right way can be the difference between success and failure.
This guide provides a step-by-step approach to securing pre-seed funding, covering funding sources, investor expectations, key strategies, and common mistakes to avoid. By following these insights, startups can maximize their chances of raising early-stage funding and building a scalable business.
Pre-seed funding is the earliest stage of investment that helps founders turn an idea into a minimum viable product (MVP). Unlike seed funding or Series A investments, pre-seed capital is often raised from angel investors, incubators, or early-stage venture capitalists (VCs).
The goal of pre-seed funding is to:
Pre-seed rounds typically range between ₹50 lakh to ₹5 crore ($60,000 to $600,000), depending on the industry and investor appetite. In high-growth sectors like fintech, SaaS, and AI-driven startups, funding amounts can be even higher.
While pre-seed investors do not expect fully developed products or strong revenues, they do look for a compelling vision, a scalable business model, and an ambitious founding team.
Securing pre-seed funding is a crucial step for early-stage startups, and choosing the right funding source can significantly impact long-term growth. From angel investors and venture capital firms to government grants and accelerators, startups have multiple funding options that provide not just capital, but also mentorship, networking, and strategic support. Understanding these sources helps founders make informed decisions and increase their chances of raising successful early-stage investment.
Angel investors are high-net-worth individuals (HNWIs) who invest in promising startups at an early stage. Many successful entrepreneurs and business leaders participate in angel investing, providing not just funding but also mentorship, strategic guidance, and networking opportunities.
Popular angel investment networks in India include Eximius Ventures, Indian Angel Network (IAN), Mumbai Angels, LetsVenture, and 100X.VC. Globally, AngelList and Tech Coast Angels are prominent platforms for raising early-stage capital.
Incubators and accelerators provide funding, mentorship, and structured programs to help startups refine their business models and scale faster. Many of these programs offer pre-seed investments in exchange for small equity stakes.
Top incubators and accelerators include Y Combinator, Techstars, Sequoia Surge, 500 Startups, and Google for Startups. In India, leading incubators like T-Hub, NSRCEL (IIM Bangalore), and CIIE (IIM Ahmedabad) support high-growth startups with funding and mentorship.
The Indian government has launched multiple grant programs to support early-stage startups, including the Startup India Seed Fund Scheme (SISFS) and NIDHI-PRAYAS. These grants provide non-dilutive capital, meaning founders do not have to give away equity in exchange for funding.
Startups working in sectors like deep-tech, healthcare, and sustainability often qualify for additional government-backed funds and innovation grants.
Micro VCs and pre-seed-focused venture capital firms invest in startups with high potential but limited traction. These investors take a long-term approach, betting on innovative ideas, strong teams, and scalable business models.
In India, leading pre-seed VCs include Blume Ventures, Titan Capital, FirstCheque, and Artha Venture Fund. Globally, firms like Precursor Ventures, Hustle Fund, and Village Global actively invest in promising early-stage startups.
Related: Micro VC Funds vs. Seed Funds
Equity crowdfunding platforms allow startups to raise small amounts of funding from multiple investors. Platforms like Tyke Invest, Republic, and Wefunder enable founders to secure pre-seed capital while building a community of early supporters.
Crowdfunding works best for consumer-focused brands, hardware startups, and direct-to-consumer (D2C) businesses, where customer engagement plays a critical role in funding success.
Preparing for pre-seed funding requires more than just a great idea- it demands a structured approach, investor readiness, and proof of market demand. Investors at this stage are betting on the team, vision, and execution potential, making it essential for startups to present a compelling business case. A well-prepared startup not only secures funding faster but also builds strong investor relationships for future funding rounds.
Investors want to see a clear and compelling pitch that outlines why your startup deserves funding. A solid pitch should address the problem, the market opportunity, and the unique value proposition (UVP) of your business. Startups need to provide a detailed business plan that showcases revenue models, market research, and scalability potential. Having realistic financial projections and a clear go-to-market strategy helps build investor confidence.
Founders should also be prepared to answer critical investor questions regarding customer acquisition costs, unit economics, and long-term sustainability. A strong narrative combined with data-driven insights makes a startup far more appealing to investors.
An investor’s primary concern at the pre-seed stage is whether the market actually needs your product. Instead of waiting for full-scale development, startups should launch a minimum viable product (MVP) to validate their concept. Even basic prototypes, beta versions, or landing pages with sign-ups can provide valuable insights into user interest and market demand.
Startups that demonstrate initial traction- such as active users, waitlists, or pre-orders- stand out to investors. Investors are more likely to fund startups that show clear evidence of demand, positive user feedback, and early revenue potential. Metrics like customer retention, conversion rates, and engagement levels help validate whether a product has scalability and long-term viability.
Investors often say, “We invest in teams, not just ideas.” A passionate, skilled, and experienced founding team increases a startup’s likelihood of securing funding. Investors look for founders with deep industry knowledge, problem-solving skills, and complementary expertise in business, technology, and product development.
Startups with a strong team dynamic, shared vision, and proven execution ability have a competitive advantage. Having advisors or mentors on board can further enhance credibility and bridge experience gaps in finance, growth, or industry-specific expertise. Investors prefer teams that demonstrate resilience, adaptability, and the ability to scale operations efficiently.
Approaching pre-seed fundraising with a well-defined strategy improves success rates. Startups must identify the right investors based on their industry, investment thesis, and funding stage. Cold pitching often leads to low response rates, so leveraging warm introductions through mentors, startup networks, or accelerator programs increases the chances of securing meetings.
Founders should maintain a targeted investor list, track outreach efforts, and continuously refine their pitch based on feedback. Preparing for investor due diligence- such as financial reports, legal compliance, and cap table transparency- is essential before raising funds.
Pre-seed funding is about more than just raising capital- it’s about proving your startup’s viability and building long-term investor relationships. Startups that focus on market validation, team strength, and a compelling business case stand out in a competitive funding landscape. By adopting a structured approach and demonstrating clear growth potential, founders can position their startups as strong investment opportunities and successfully secure early-stage funding.
Raising pre-seed funding is a critical milestone for early-stage startups, enabling them to develop products, validate market demand, and scale operations. With the right strategy, strong investor outreach, and a well-prepared business model, startups can successfully secure pre-seed capital from angel investors, accelerators, venture funds, and government programs.
As the Indian startup ecosystem continues to thrive, investors are actively looking for innovative, scalable, and high-growth startups to back. Founders who focus on market validation, team strength, and a compelling value proposition will have the best chance of attracting pre-seed investment and building a successful, sustainable business.
While pre-seed funding is essential, it comes with its own set of challenges:
Securing pre-seed funding is a critical milestone in building a successful startup. By understanding the process, preparing effectively, and approaching the right investors, you can raise the capital needed to bring your vision to life. While the journey may be challenging, a well-thought-out plan and clear value proposition can significantly improve your chances of success. Remember, pre-seed funding is not just about the money, it’s about finding partners who believe in your vision and can help you achieve it.
With the right approach and mindset, you can navigate the pre-seed funding process confidently and set your startup on a path to success.
Pre-seed funding typically ranges from ₹50 lakh to ₹5 crore ($60,000 to $600,000), depending on the industry, market potential, and investor confidence.
No, but investors expect market validation, a strong team, and a scalable business model before committing capital.
Related: How to Calculate TAM, SAM & SOM for Your Business
Startups need a pitch deck, business plan, financial projections, legal structure details, and cap table transparency to secure pre-seed investment.
Eximius Capital Ventures Private Limited is the investment manager of the funds licensed by SEBI under AIF categories CAT I – Eximius Trust I (IN/AIF1/20-21/0855) and CAT II – Eximius Fund (IN/AIF2/24-25/1566).
Eximius Capital Ventures Private Limited is the investment manager of the funds licensed by SEBI under AIF categories CAT I – Eximius Trust I (IN/AIF1/20-21/0855) and CAT II – Eximius Fund (IN/AIF2/24-25/1566).
