Pre-seed valuations in 2025: What founders need to know

Keeping up with trends in valuations for startups comparable to yours is essential during fundraising, as it can significantly inform your negotiations with prospective investors.

If your startup is in the pre-seed stage, here’s what you should know about pre-seed valuations in 2025, including what constitutes a good amount and how to calculate it, even if you’re pre-revenue.

What is a good pre-seed valuation amount?

According to the most recent Pitchbook data, the average pre-seed, pre-money valuation is $5.7M, while the median valuation is slightly lower at $5.3M. 

However, those metrics may be of limited use in determining what constitutes a “good” pre-seed valuation for several reasons.

For one, the concept of a good startup valuation can be tough to pin down in general. Valuation outlooks fluctuate over time as market trends, economic conditions, and investor attitudes shift, as evidenced below.

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In addition, each industry has unique valuation tendencies, so universal averages can be misleading. For example, SaaS and biotech operations differ significantly, which can lead to large valuation discrepancies at the same fundraising stage.

For pre-seed valuations specifically, data is harder to come by than usual since many investments come from friends and family or angel investors. These deals often go unreported and may not be well represented in aggregated datasets.

It can also be harder to make meaningful valuations of pre-seed companies due to a lack of tangible financial history. In fact, pre-seed valuations are more often a function of whatever investment you’re able to raise than the other way around.

You can learn about later-stage startup valuations in our articles on Series A Valuations and Series B Valuations.

How to calculate pre-seed valuation

In practice, pre-seed valuations are typically calculated by working backward from the terms of an investment deal. In other words, the amount your investor is willing to pay for a stake in your company effectively determines its worth.

For example, say you raise $250K in a pre-seed funding round from an angel investor in exchange for a 15% equity stake in your company. $250K is 15% of $1.67M, implying a post-money valuation of $1.67M and a pre-money valuation of $1.42M.

Of course, this assumes you’ve already completed a pre-seed round. If you’re looking to calculate your pre-seed valuation before securing an investment, you’ll have to use a different strategy.

Since the average pre-seed stage startup lacks revenue, it’s tough to assign a realistic valuation using concrete metrics. Traditional startup valuation methods, like discounted cash flow (DCF) and revenue multiples, aren’t very effective.

Instead, you usually have to use approaches that have more to do with your startup’s potential than its performance.

• Berkus method: This valuation method involves assigning a dollar value to the various aspects of your company, including its management team, prototype, and market size. It typically caps out at $2.5M.
• Scorecard method: This method compares your startup to similar companies, such as those in the same industry and area, then adjusts the average valuation up or down based on similar qualitative factors as those in the Berkus method.
• Risk-factor summation method: Like the scorecard method, this approach starts with a baseline valuation derived from comparables. Then, it assigns a rating to 12 risk factors and adjusts the valuation up or down for each.

Keep in mind that while these are better than nothing, they’re not as reliable as those rooted in hard data. They can serve as a starting point for negotiations, but your pre-seed valuation will probably be determined by your investor.

How does pre-seed funding work?

Pre-seed is the earliest stage of development for startups, during which most founders are primarily focused on bringing their idea to life. As a result, pre-seed funding is typically used to accomplish that, facilitating processes like:

• Hiring critical, early-stage team members
• Setting up the company as a separate entity
• Acquiring necessary supplies and equipment
• Conducting initial market research
• Building a minimum viable product (MVP)

Because pre-seed startups are often pre-revenue and high risk, pre-seed startup funding tends to come from different investors than those interested in more established startups. For example, some of the most common types of pre-seed investors include:

• Friends, family, and others from your personal network
• Accredited angel investors with high net worths and incomes
• Crowdfunding through specialized digital platforms
• Accelerators, incubators, and similar programs
• Venture capital (VC) firms that specialize in pre-seed startups

Due to the nature of pre-seed startups and investors, these rounds also tend to be smaller than priced rounds. There are exceptions, but the majority generate less than $1M in funding, and only around 10% to 15% raise more than $2.5M.

Notably, pre-seed funding amounts have been trending smaller on average since 2023. More rounds generated less than $250K in Q3 2024 than they have since 2019. Here’s a summary of the most recent data:

What investors are looking for in a pre-seed company

Since pre-seed companies don’t tend to have much traction by definition, investors are often looking primarily for evidence of high growth potential—and high returns potential—rather than proven financial performance.

While that can be more difficult to quantify, there are still fairly tangible ways to assess it. For example, here are some of the most common factors investors consider when analyzing a pre-seed company:

• Quality of the idea: Is your startup solving a real and significant problem, and does it offer an innovative or effective solution?
• Development of MVP: What will it take to develop an MVP? If you already have one, how strong is the market fit, and how effectively will you be able to scale?
• Strength of the founders: Do you and your management team have experience founding and scaling prior startups? What other kinds of expertise do you have that relate to your startup’s industry, offering, or model?

All that said, if your pre-seed startup does already have early signs of traction, it can go a long way toward attracting a potential investor. That might include positive customer feedback, pre-orders, or even some initial sales.

Typical pre-seed funding round structure

Simple Agreements for Future Equity (SAFEs) are the most popular pre-seed funding round structure, by far. In Q3 2024, they accounted for 89% of all pre-priced rounds, according to Carta data.

SAFEs, or SAFE notes, are a type of convertible instrument that grants investors the right to claim some amount of equity in your startup at a future date. Typically, the conversion triggers whenever you complete your first Series A round.

SAFEs were initially developed by the Y Combinator in 2013 as an alternative to convertible notes, the second-most popular funding structure for a pre-seed round.

The difference is that convertible notes function like debt until they convert to equity, accruing interest and eventually maturing, while SAFEs do not.

Otherwise, the two types of notes work very similarly. Both use discount rates and valuation caps to determine the amount of equity the investor can claim when the triggering event occurs.

With a discount rate, a note converts as if the investor were buying shares at a discount, such as 15% or 20%. With a valuation cap, the note converts based upon a pre-agreed maximum valuation, regardless of your startup’s actual valuation at the triggering event.

Pre-seed vs series A funding

Pre-seed funding is the earliest investment round a startup can complete. It typically occurs when your business is getting started, and the funds are primarily used to establish the company and bring the initial idea to life.

Meanwhile, Series A funding is the first priced round and occurs once your business has gained significant traction and proven its growth potential. The purpose of a Series A investment is to expand and scale your operations.

As a result, these two types of early-stage funding have some significant differences. Here’s how they contrast in various fundamental ways:

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You can learn more about how pre-seed fundraising compares to other types in our article Pre-Seed vs Seed Funding.

How to prepare your finances for fundraising

Whether you’re looking to complete a pre-seed or a Series A round, preparing your finances is essential for success. That may look different depending on your stage of development, but here are some steps you should always consider:

• Plan the use of your funds: Investors want to know that you have a clear strategy for using their money to accomplish your goals. Consider developing a budget with specific categories, like marketing and labor for MVP development.
• Build financial statements: Even if you have minimal financial activity, provide at least a basic balance sheet and income statement. As you gain traction, full GAAP financials will become more appropriate.
• Create financial projections: Develop realistic projections of revenue, expenses, and other key metrics. Make sure to go into detail about your most significant costs, like employee wages and benefits.
• Determine your valuation: Use techniques appropriate to your stage of development to estimate your startup’s value and inform negotiations.

Above all, be prepared to defend the reasoning behind your financial strategies and projections. Investors often care just as much about how you think and how well you know your business as they do your actual numbers.

Use Zeni to prepare for your next fundraising

Fundraising is often one of the most challenging parts of growing a startup, especially on top of your other day-to-day responsibilities. Fortunately, Zeni’s comprehensive financial operations platform makes the process significantly easier.

In addition to AI-enhanced bookkeeping that automatically keeps your records in order, we offer fractional CFO advisory services to help you navigate anything from financial modeling to investor pitches.

Schedule a demo today to see how Zeni can simplify your life as a startup founder.