The top 6 findings for founders from our new State of Pre-Seed report.
Fresh data for US startups in Q2 2024, hit me in the comments for a direct link.
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1. SAFEs now make up the majority of rounds of under $3 million. 90% of rounds under $1 million are happening through SAFEs (vs priced equity).
2. 85% of SAFEs are post-money.
3. SAFE terms by share: 57% valuation cap only, 35% val cap + discount, 7% discount only, almost none uncapped & no discount.
4. Median valuation cap for a $1 million raise remains $10M (post-money). Val caps for a $500K raise float around $7-8M.
5. Small checks (under $25K) were a little harder to find in the most recent quarter, with the larger checks taking more share of total investment.
6. When present, the median discount is 20% (whether or not a valuation cap is also in the terms).
7. Bonus: average interest rates on convertible notes ticked up to 7.8% in Q2 vs 6.8% in Q2 2023.
Super grateful to the more than 10,000 companies currently on Carta Launch (our free cap table offering for companies that have raised less than $1 million). If you're on Launch, don't sweat - this data is available in-app for you right where you need it!
Overall I'd say this was a quarter of consolidation for pre-seed, with no major shifts. I have been waiting to see if a backlash to SAFEs (or at least stacking SAFEs) would show up in the numbers but no indications yet.
Shout out to Hamza Shad and Kevin Dowd for their work putting this report together. Share with your favorite pre-seed founders!
#startups #preseed #founders #SAFEs
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