What is pre-seed funding?

Pre-seed funding refers to the initial capital raised by a startup to validate its concept and develop a prototype before seeking larger investments. This stage typically involves founders using personal savings, funds from family and friends, or small grants. Pre-seed funding helps cover basic expenses such as market research, product development, and initial marketing efforts.

For example, a tech startup might raise pre-seed funding to build a proof-of-concept app or conduct early user testing. This early-stage financing is crucial for startups to refine their ideas and attract larger investments in later stages of growth.