Early-stage startup founders and operators entered 2024 with bated breath, hoping that the fundraising environment would rebound. Now that the dust has settled, how did the year shape up for those at the earliest stages of the venture ecosystem?
Although 2024 began as a promising year for growth in the pre-seed market, with quarterly increases in total cash raised in Q1 and Q2, it ended rather anticlimatically. Fundraising declined in both Q3 and Q4. Companies brought in a total of $716 million in the final quarter of the year, dropping a striking 25% from Q3’s $965 million.
Overall, pre-seed startups in the United States raised money through over 25,000 convertible instruments on Carta in 2024.The total capital invested stood at $4 billion, essentially flat from 2023—not quite the rebound that many in the startup world desired.
Compared to Q4 2023, there were fewer rounds raised—and at smaller sizes—in Q4 2024. Deals under $250,000 made up 44% of all pre-priced rounds in Q4 2024, compared to just 30% in Q4 2023. While there was a small percentage of large rounds, fundraising in 2024 was unexceptional for most early-stage ventures.
The report below unpacks macro trends in fundraising activity and round sizes using Carta’s authoritative dataset. It also offers comparative insights on SAFEs and convertible notes—including valuation caps, check sizes, dilution, discount percentages, and more.
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Download the full reportQ4 highlights
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Overall reduction of pre-seed activity: $716 million went to pre-seed startups in Q4, down from $965 million in Q3 and $1.2 billion in Q2. The distribution of deals also shifted towards smaller rounds.
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Pre-seed funding is dispersed: While California captured 39% of pre-seed cash in 2024, New York and New Jersey took in 13% and 8%, respectively. Other states above 3% included Massachusetts, Washington, Texas, and Florida.
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Steady valuation caps: Median valuation caps for post-money SAFEs have remained relatively stable, sitting at $10 million for rounds between $500,000 and $1 million.
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Top metro areas: After the Bay Area and New York, the next largest hubs for pre-seed fundraising in 2024 were Los Angeles, Boston, and Austin.
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SAFEs take over medical devices: A majority of pre-seed cash raised in 2024 by medical device startups—which historically favored convertible notes—was on SAFEs.
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Declining interest rates: The median interest rate on convertible notes fell from 8% to 7.5% in Q4, following federal rate cuts in both Q3 and Q4.
Key trends
SAFEs
Convertible notes
Industries
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Methodology
Carta helps more than 50,000 primarily venture-backed companies and 2,400,000 security holders manage over $3.0 trillion in equity. We share insights from this unmatched dataset about the private markets and venture ecosystem to help founders, employees, and investors make informed decisions and understand market conditions.
Overview
This study uses an aggregated and anonymized sample of Carta customer data. Companies that have contractually requested that we not use their data in anonymized and aggregated studies are not included in this analysis.
The data presented in this pre-seed report represents a snapshot as of February 11, 2025. It encompasses over 100,000 convertible instruments raised by more than 9,000 startups in the United States from 2020 to 2024, with a focus on the 25,000+ instruments raised in 2024.
Historical data may change in future studies because there is typically an administrative lag between the time a transaction took place and when it is recorded in Carta. In addition, new companies signing up for Carta’s services will increase historical data available for the report.
Definitions
This report defines “pre-seed” as any fundraising activity that occurs on convertible instruments prior to a company’s first priced equity round. Convertible notes and SAFEs are the two types of convertible instruments analyzed.
A pre-priced “round” (or “deal”) is defined as encompassing all of the convertible instruments that a given company has raised with the same valuation cap, prior to raising any priced equity.
