december 3, 2025
at afore capital, when we announced our newest fund ($185m fund iv) at the start of 2025, we introduced a new term: “pre-seed 2.0.”
more context on the fund announcement here: https://medium.com/@afore/afores-185-million-fund-iv-introducing-pre-seed-2-0-efabd59e3e78
afore was started back in 2016 and helped launch the pre-seed category (had to work with crunchbase to add “pre-seed” as a funding stage tag). back then, 14% of seed rounds were classified as “pre-seed,” and by 2023, pre-seed rounds represented nearly 60% of all seed deals (according to data from crunchbase).
every investor claims to back “pre-seed” founders, but everyone also has very different definitions in their head for what “pre-seed” actually means. i wanted to offer another framework for investing in founders a the earliest stages.
let’s start with the “seed” stage, which is generally accepted as a category, and defined roughly as “pre-product market fit” or “pre-series a.” many seed investors can essentially cosplay series a investors - find the same types of founders, create similar industry theses, etc - but make an investment when the startup is at a few hundred thousand in arr, instead of $1m+ in arr. you’re doing similar work on both the sourcing and diligence side, but just “going a bit earlier.”
so you could theoretically view “pre-seed” as “going a bit earlier” than seed. instead of investing at $500k in arr, why not invest when the company has less revenue traction, say just $10k in arr.
i think viewing pre-seed as “cosplaying seed investors, but willing to accept less traction” (where sourcing / diligence / other activities across pre-seed and seed investing are the same) falls into the same trap as viewing seed investors as series a investors that go earlier. this seems like a tough game to play. one reason is that the later-stage investor will always be willing to reach down and invest a bit earlier into teams they think are exceptional. another reason is that perhaps going earlier changes the risk profile, and also the underwriting you should be doing.
pre-seed investing should really be about investing in people. not about “doing the same thing, but a bit earlier” or finding people you can feed to seed funds six months down the line.
everyone says they invest in people, but there are certain investors that do more diligence into the person (and their ability to come up with good ideas) than others. you can tell by the way they talk about an opportunity / founder they want to invest in.
this brings us to “pre-seed 2.0.” previously, pre-seed vc’s would invest after there is an idea, but usually very little traction. but there are lots of things that have to happen before the full pre-seed package is there (you need to quit your job, find a co-founder, try out a few different ideas, narrow down to one that seems pitch-able, craft a deck or at least a story you can tell investors, etc). pre-seed 2.0 is less about “going earlier” (before the idea) and more about investing in people. it’s hard to copy the seed investing playbooks and shift earlier, it’s more about finding really interesting people you want to work with, and supporting them wherever they are at on their journey, which will look slightly different for each founder you work with.
here are a few components of this strategy outlined on our fund announcement post:
- of course, it’s never too early (pre-idea or post-idea, “pre-founder” or post-founder, pre-design partner or post, founder has quit their job or is still in school, etc). partnering with the right investors can help you move faster
- investment offers are tailored to each person and their situation. this could mean a $10k check or a $2m check. everybody is at a different stage in their pre-seed 2.0 journey, and it’s hard to offer a one-size-fits-all investing product / terms.
- freedom to build, on the founder’s timeline. many accelerators have a “hatch-and-dispatch” model where they accelerate you towards a demo day in a few months time. but the problem with this is that it can take a long time to come up with a good idea, reach conviction on it, and find product-market fit. when you have artificial deadlines based around fundraising at a demo day, you might make decisions that are not in the long-term best interests of your business. taking away as much external pressure to hit arbitrary milestones as possible, while keeping pace and focus on point, is a better approach here.
- no ulterior motives: having a stage-specific investor that specializes in this “pre-pmf” or “pre-seed 2.0” stage can be helpful, because you know the investor wants to work with you now, and they are not buying a call option to invest later (after you have done the hard work on your own). many series a funds invest in seed rounds this way, and some seed funds invest opportunistically in pre-seeds this way too.
- low-volume = better support. this pre-seed 2.0” stage is very intensive and a lot of hands-on support can be pretty helpful, but that’s hard to offer as a vc firm if you’re investing in a huge batch of people. you probably want an investor that makes a limited number of investments per year where each one is a priority.
learn more about afore here: https://www.afore.vc/