How much does industry matter in pre-seed startup fundraising?
Short answer: way more than you thought.
Look at how the valuation cap and total fundraise for pre-seed companies moves in tandem. The median valuation cap and median total raise for 15 key startup industries.
How to read the chart:
- y-axis is the median valuation cap (all data is for pre-seed SAFEs)
- x-axis is the median amount raised per company in a given industry
- bubble size is how many companies in the dataset
This is the freshest possible data (3/14/23) - we're looking only at companies that have raised on SAFEs so far in 2023.
Note that this data comes from US startups only and is skewed towards those in CA and NY.
FINDINGS:
- Biotech companies raise the most money at the highest valuation caps - but not a lot of them actually get funded.
- SaaS is middle of the pack in val cap and total raised, but by far the biggest category.
- Investors seem less enthused about food startups lately.
- Gaming and Web3 has big potential. Thats why we offer our gaming fund to VIP members. This by far has the biggest potential in our view.
How Startup Funding Works (pre-seed vs. seed)
A Gateway to High-Growth Opportunities
Pre-seed investing can seem complex at first glance, but understanding its fundamental principles can unlock significant opportunities. Here's a breakdown of how it works:
How to Get Involved in Pre-Seed Investments
1️⃣Evaluate the Opportunity: Entering the pre-seed stage requires a sharp eye for potential. Investors must rely on someone with a strong track record of identifying promising startups. This person’s ability to spot a potential success story early on is crucial.
2️⃣High Net Worth Requirement: Pre-seed investments typically require significant financial resources. High net worth individuals are often the first to gain access to these opportunities due to the capital-intensive nature of early-stage investing.
3️⃣Access and Timing: In the competitive world of startups, being early is everything. The earlier you learn about and invest in a startup, the better your chances of securing a favorable stake.
The Reality of Startup Success
Risk Awareness: It’s essential to recognize that 9 out of 10 startups fail. Despite this, the potential for high returns exists, especially when you have insider knowledge and early access. Timing, access, and budget alignment are key factors that influence success in pre-seed investing.
The Evolution of Startup Value
When a startup performs well, the value of your investment can grow significantly over time. Here’s a typical journey of a startup from its inception to a public offering:
1. Pre-Seed Stage: The founder begins with just an idea, owning 100% of the company.
2. Co-Founders: The founder may bring in a co-founder, splitting ownership (e.g., 50/50).
3. Family and Friends: Early supporters, such as family and friends, invest at the lowest valuation, securing shares before the startup gains wider attention.
4. Angel Investors: Experienced investors who provide capital in exchange for equity at an early stage, often based on their own funds.
5. Seed Round: This phase involves raising more capital, typically from institutional investors, to further develop the product or service.
6. Venture Capital: As the startup grows, venture capitalists invest in exchange for equity, often providing the substantial funding needed for rapid expansion.
7. Employee Shares: Early employees may receive shares as part of their compensation, aligning their interests with the company's success.
8. Investment Bankers and IPO: Investment bankers prepare the company for an Initial Public Offering (IPO), where shares become available to the public.
✅Simplifying the Process
Yes, the process may seem intricate, but today, with the right information and connections, you can bypass many complexities.
🚨Interested in taking the shortcut?
Connect with us, and we'll show you how to capitalize on these opportunities.
At Cryptoscout24 we are able to provide you a one-stop package. Think about it having a chance to invest in the next Google, Amazon, or Uber at family or pre-seed levels. Whether its built by by the foundation or by 3rd parties, all projects are vetted before being shared with the VIP community. It will enable you to:
- Get access to pre-seed investment opportunities
- Enter with your own investment at $10,000
- Have a no-fee entry into these investments (no management fee, no performance fee)
- Get professionally managed projects by people with a 30 years proven track record in strategic investing
Apply for a seat today. Availability is on invitation-only base. For more information send email to preseed@cryptoscout24.com with your availability of a phone call.