The pre-seed funding landscape has evolved dramatically over the past decade, transforming from a rare occurrence to the second most common type of venture round globally. (Metal Blog) For SaaS founders preparing to raise their first institutional round in 2025, understanding current market benchmarks is crucial for setting realistic expectations and positioning their company effectively.
This comprehensive analysis synthesizes the latest data from industry leaders to provide founders with actionable insights on pre-seed round sizes, valuations, and market dynamics specific to U.S. SaaS startups in 2025.
The Current Pre-Seed Market Landscape
Market Size and Growth Trajectory
Pre-seed has become the fastest growing round type, now responsible for over 20% of all venture rounds globally. (Metal Blog) This growth is driven primarily by fund managers looking to invest in companies at the earliest stages when valuations are lowest, as venture returns have historically been highly concentrated at these early stages.
The total number of pre-seed and seed funding rounds announced in the U.S. since 2010 has reached 65,475, demonstrating the maturation of this funding category. (NPBitsandBytes) However, despite this volume growth, the market faced headwinds in 2024, with U.S. seed funding reaching $6.4 billion in H1 2024, remaining flat compared to H2 2023 and down from $7 billion in H1 2023. (Crunchbase)
Investor Concentration and Optionality
One critical insight for founders is that pre-seed activity is highly concentrated within a small pool of investors. While pre-seed rounds occur in larger numbers than Series A financings, the total number of investors specializing at pre-seed is about one-third that of Series A. (Metal Blog)
This concentration means that each pre-seed specialist is making a large number of investments annually to spread the high risk across a broader distribution of companies. Pre-seed investments tend to be experimental in nature, with failure rates typically ranging from 50-90% of all financings. (Metal Blog)
2025 Pre-Seed Round Size Benchmarks
Overall Market Data
According to Carta's comprehensive cap table data, a vast majority of pre-seed rounds in the U.S. tend to be in the $1-2 million range. (Metal Blog) This data represents thousands of companies using Carta's platform for cap table management, providing a robust sample size for industry benchmarks.
AngelList's market data, which represents aggregated and anonymized investments from fund managers on their platform, shows pre-seed rounds in the U.S. have been raised at $5-10 million valuations. (Metal Blog) This valuation range provides important context for founders calculating dilution and setting fundraising targets.
Geographic Variations
Geographical analysis reveals interesting patterns in pre-seed funding distribution. Capital deployment is accelerating outside traditional hubs, with growth occurring across the Atlantic, Bay Area, Midwest, Mountain West, South, Southeast, Southwest, Pacific Northwest, Northeast, and New York City regions. (NPBitsandBytes)
SF Bay Area: Remains the largest hub for pre-seed activity, with round sizes typically at the higher end of the $1-2M range due to higher operational costs and competitive dynamics.
Boston/Northeast: Shows consistent activity with round sizes generally aligned with national averages, benefiting from strong university ecosystems and established investor networks.
Remote-First Companies: Increasingly common, these startups often raise at the lower end of the range ($1-1.5M) due to reduced operational overhead and distributed team structures.
Business Model Breakdown
B2B SaaS Startups
B2B SaaS companies represent a significant portion of pre-seed activity, with round sizes typically falling within the standard $1-2M range. However, these companies often demonstrate stronger unit economics early on, which can justify higher valuations within the $5-10M range. (AngelList)
For B2B SaaS startups, investors typically expect:
• Some form of market validation or early prototype
• A small set of engaged users or early paying customers
• Clear evidence of latent demand in the target market
B2C SaaS Startups
B2C SaaS companies face different dynamics, often requiring larger user bases to demonstrate traction. Round sizes tend to be similar to B2B counterparts, but the path to demonstrating product-market fit may require different metrics and longer development cycles.
Founder Profile Impact
Solo Founders vs. Teams
Data suggests that founding teams (2-3 co-founders) tend to raise slightly larger pre-seed rounds compared to solo founders. This difference stems from:
• Risk Mitigation: Investors view teams as lower risk due to complementary skill sets
• Execution Capacity: Teams can typically execute faster on multiple fronts simultaneously
• Network Effects: Multiple founders bring broader networks for customer acquisition and follow-on funding
Solo founders can still successfully raise within the standard range but may need to demonstrate stronger individual capabilities and have clear plans for key hires.
Valuation Dynamics and Market Conditions
Current Valuation Environment
The valuation environment for pre-seed rounds has stabilized after the market correction following 2021's peak. AngelList's Q1 2024 SAFE market data shows that valuations have found a more sustainable equilibrium, with the $5-10M range representing the new normal for quality pre-seed opportunities. (AngelList)
Impact of AI and Technology Trends
2024 marked a breakout year for AI company funding, with close to a third of all global venture funding going to AI-related fields. (Crunchbase) This trend has created a bifurcation in the pre-seed market:
• AI-Enabled SaaS: Companies with clear AI integration often command premium valuations within or above the standard range
• Traditional SaaS: Non-AI SaaS companies face more standard valuation expectations but benefit from less competition for investor attention
Investor Expectations and Stage Requirements
What Investors Look For
At pre-seed, investors have varying expectations, but common themes emerge across the ecosystem. Accelerators commonly invest in companies that do not yet have revenue or product, while other venture investors tend to expect some form of market validation or an early prototype. (Metal Blog)
For software companies, a small set of engaged freemium users or paying customers typically serves as a strong indicator of latent demand. (Metal Blog) The quality and extent of customer feedback often varies considerably, depending on the nature and type of product.
Stage Objectives
Most commonly, pre-seed rounds provide capital for founders to build a product and achieve preliminary market traction. (Metal Blog) These two outcomes typically qualify companies for a seed round, which then provides larger amounts of capital to further develop the product and grow the business.
Founders should have crystal clarity on their objectives for the raise, laid out clearly in their initial deck with an advanced level of detail. The specific objectives may vary by sector and require founders to first develop an understanding of what they need to reach the next funding milestone.
Actionable Strategies for Founders
Setting Realistic Round Size Targets
Based on the data analysis, founders should consider the following framework for setting their pre-seed target:
Conservative Target: $1.0-1.2M
• Suitable for: Solo founders, early-stage products, non-AI SaaS
• Geography: Secondary markets, remote-first companies
• Timeline: 12-18 months of runway
Standard Target: $1.5-1.8M
• Suitable for: Small teams, validated concepts, B2B SaaS with early traction
• Geography: Most U.S. markets
• Timeline: 18-24 months of runway
Aggressive Target: $2.0M+
• Suitable for: Strong teams, AI-enabled products, proven market demand
• Geography: SF Bay Area, competitive markets
• Timeline: 24+ months of runway
Calculating Dilution and Ownership
With pre-seed valuations typically in the $5-10M range, founders can expect to give up 15-25% equity in their pre-seed round. Metal's platform includes built-in calculators to help founders model different scenarios and understand the dilution impact of various round sizes and valuations. (Metal Blog)
Calibrating Investor Expectations
Given the concentrated nature of the pre-seed investor ecosystem, founders must be strategic about their approach. The limited optionality at pre-seed makes it critical to rely on data rather than hearsay to correctly identify investors that specialize at this stage. (Metal Blog)
Key Investor Characteristics to Target:
1. Stage Specialists: Focus on investors who make 25%+ of their investments at pre-seed
2. Active Deployment: Target funds that have made at least one investment in the past 3-6 months
3. Appropriate Fund Size: Ensure the fund size supports your target check size (typically 1-2% of total fund size)
Leveraging Data-Driven Investor Identification
Metal's platform helps founders identify the "most likely" investors by filtering based on stage, sector, geography, and 20+ other granular criteria. (Metal Blog) This data-driven approach significantly improves conversion rates at every step of the fundraising funnel.
The platform also integrates with LinkedIn, Gmail, and other data sources to identify warm introduction paths, which are crucial given the relationship-driven nature of pre-seed investing. (Metal Blog)
Market Outlook and Trends
Recovery Patterns
Global startup funding in 2024 reached close to $314 billion, up around 3% from $304 billion in 2023, suggesting a stabilization after the 2022-2023 downturn. (Crunchbase) This recovery has been particularly pronounced in the seed stage, which proved to be the most robust funding stage during the downturn.
Accelerator Role
Accelerators remain responsible for over 35% of all pre-seed rounds globally, playing a crucial role in the ecosystem. (Metal Blog) For first-time founders, accelerators create an enabling environment with network effects and shared learning opportunities, particularly evident with large programs like Y Combinator and Techstars.
Sector Concentration
While most pre-seed investors tend to be open to a broad spectrum of sectors, concentration patterns emerge based on market forces and strategic focus areas. (Metal Blog) SaaS continues to represent a significant portion of pre-seed activity due to its scalable business model and clear path to Series A metrics.
Preparing for the Next Stage
Series A Readiness
Understanding pre-seed benchmarks is only valuable in the context of preparing for subsequent rounds. For most founders, Series A will be the first "priced" round where the company's valuation is explicitly determined before new investors purchase shares. (Metal Blog)
The market for Series A financing has been particularly challenging after the 2022 market downturn, though many industry observers explain this as a "return to normal" rather than a permanent shift. (Metal Blog)
Building Toward Series A Metrics
SaaS companies have successfully raised Series A rounds with $0.5-1M in annualized run rate (with 100-150% year-over-year growth) on the lower end, while others have shown $3-3.5M in annualized revenue run rate (with 500%+ year-over-year growth) on the upper end. (Metal Blog)
Key Takeaways and Recommendations
For Founders Raising Pre-Seed in 2025:
1. Target Range: Plan for $1-2M rounds at $5-10M valuations based on current market data
2. Geographic Strategy: Consider cost advantages of remote-first or secondary market operations
3. Investor Focus: Prioritize stage specialists who actively deploy capital at pre-seed
4. Business Model: B2B SaaS continues to show strong investor interest with clear path to metrics
5. Team Composition: Consider co-founder additions before fundraising to strengthen investor confidence
Execution Strategy:
1. Data-Driven Approach: Use platforms like Metal to identify and qualify the most likely investors (Metal Blog)
2. Network Leverage: Prioritize warm introductions through existing connections
3. Clear Objectives: Define specific milestones and use of funds for the 12-24 month period
4. Market Validation: Demonstrate early customer traction or strong demand signals
5. Competitive Positioning: Understand your position relative to AI-enabled and traditional SaaS categories
The pre-seed landscape in 2025 offers significant opportunities for well-prepared SaaS founders. By understanding current benchmarks, targeting the right investors, and setting realistic expectations, founders can navigate this critical funding stage successfully. The key is combining market intelligence with strategic execution to maximize the probability of closing a round that provides sufficient runway to reach Series A milestones.
As the venture market continues to stabilize and mature, founders who take a data-driven approach to fundraising will have a significant advantage in securing the capital needed to build and scale their SaaS businesses. (Metal Blog)
Frequently Asked Questions
What is the average pre-seed round size for U.S. SaaS startups in 2025?
Based on 2025 data from AngelList and other sources, pre-seed rounds for U.S. SaaS startups typically range from $250K to $1.5M, with the median falling around $500K-$750K. AI-focused SaaS companies tend to raise larger rounds due to higher development costs and investor interest, while traditional SaaS startups maintain more conservative round sizes.
How has pre-seed funding evolved since 2010?
Pre-seed funding has transformed dramatically, with over 65,475 pre-seed and seed rounds announced in the U.S. since 2010. What was once a rare occurrence has become the second most common type of venture round globally. Pre-seed has emerged as its own distinct asset class, with capital deployment accelerating outside traditional hubs like Silicon Valley.
What are the key differences between AI and non-AI SaaS pre-seed rounds?
AI-focused SaaS startups typically raise larger pre-seed rounds due to higher computational costs, data requirements, and talent acquisition needs. According to Carta data, AI and non-AI SaaS companies show distinct median valuations and round sizes, with AI companies often commanding premium valuations even at the pre-seed stage.
How long should founders expect between pre-seed and Series A rounds?
Based on recent market data, software startups typically raise their Series A approximately 15 months after their seed round. This timeline has extended compared to previous years when Series A rounds were raised about three months earlier, reflecting the current market's emphasis on demonstrating stronger traction before advancing to later stages.
What geographic variations exist in pre-seed funding for SaaS startups?
Pre-seed funding has expanded significantly beyond traditional hubs, with growth occurring across regions including the Atlantic, Midwest, Mountain West, South, Southeast, Southwest, Pacific Northwest, and Northeast. While Bay Area and New York City remain dominant, emerging markets are seeing increased seed-stage activity and capital deployment.
How has the pre-seed funding market performed in 2024 compared to previous years?
In H1 2024, U.S. seed funding reached $6.4 billion, remaining flat compared to H2 2023 but down from $7 billion in H1 2023. Despite the overall venture market downturn, seed funding has been the most robust stage during the slowdown following the 2021 peak, maintaining levels well above 2020 amounts even as late-stage funding contracted significantly.
Sources
1. https://news.crunchbase.com/seed/market-dilemmas-slow-h1-2024/
2. https://news.crunchbase.com/venture/global-funding-data-analysis-ai-eoy-2024/
3. https://npbitsandbytes.substack.com/p/trends-from-analyzing-every-pre-seed-55e
4. https://stack.angellist.com/safe/market
5. https://stack.angellist.com/valuations
7. https://www.metal.so/blog/an-empirical-overview-of-series-a
