5 data-driven lessons on pre-seed startup fundraising in 2023.
These lessons are drawn from our (first ever!) State of Pre-Seed Report.
We cover nearly 11,000 separate investments into 2,500+ US pre-seed companies in 2023 alone.
At Carta, we define “pre-seed” as any company that has yet to raise a priced equity round. Of course we break things down by amount raised to give founders an even more targeted set of benchmarks.
The full report covers: overall pre-seed activity, SAFEs vs convertible notes, valuation caps, discounts, pre vs post money, check sizes...deep breath...industry variations, regional variations, interest rates on convertible notes, state investment comparisons, ecosystem health over the past 3 years - all the things.
The 5 lessons:
1. You'll likely be raising pre-seed money on SAFEs - unless you're building a Medical Device, Hardware, or Biotech company. Companies in those 3 industries saw at least 45% of total investment come through Convertible Notes in 2023.
2. Post-money is the default. 89% of all money raised on SAFEs in 2023 came through post-money SAFEs. This is a slightly more investor-friendly flavor of the instrument (and happens to be the YC standard).
3. Match your valuation cap to your total expected fundraise. The median valuation cap on a post-money SAFE is currently $10 million - but that number goes up and down with the total dollars raised. If you are raising $400K, for instance, that current median is a $6.5M val cap.
4. Stick with the standard discount. Of the SAFEs issued with a discount so far this year, two-thirds have a discount rate of 20%.
5. If you raise on a Convertible Note, your interest rate will likely be 6%. That's been the median interest rate on notes since Q4 2021. There has been a little bump in the average of late, but 6% remains the default.
I think this is the largest study of pre-seed investing available anywhere - so please share with your favorite early founder or angel investor. Full report in the first comment below.
As for the chart below - looks like pre-seed investment is holding up much better than other stages. Up 39% if you compare last quarter to Q1 2021 (whereas Series A is down 50% over the same timeframe). Hopeful signal for the companies just starting out!
#cartadata #preseed #SAFEs #valuationcap #fundraising #founders
DISCLOSURE: This communication is on behalf of eShares, Inc. dba Carta, Inc. ("Carta"). This communication is for informational purposes only, and contains general information only. Carta is not, by means of this communication, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This publication is not a substitute for such professional advice or services nor should it be used as a basis for any decision or action that may affect your business or interests. Before making any decision or taking any action that may affect your business or interests, you should consult a qualified professional advisor. This communication is not intended as a recommendation, offer or solicitation for the purchase or sale of any security. Carta does not assume any liability for reliance on the information provided herein. © 2026 Carta. All rights reserved. Reproduction prohibited.
