State of Pre-Seed: Q2 2026

Introduction

Over the past year, there has been a concentration of capital in the pre-seed market, with similar sums of cash going into noticeably fewer deals. As of this publication, U.S.-based startups on Carta raised $3.19 billion across more than 11,500 pre-seed instruments (i.e., SAFEs and convertible notes) in Q2 2026. Last year’s Q2, on the other hand, saw $3.22 billion invested across 14,825 instruments.

The concentration of capital is illustrated by the rise in average instrument size, calculated by dividing the total dollars invested by the count of instruments. In Q2 2026, the average instrument size came out to $276,000, representing a 27% year-over-year increase from Q2 2025 and a record high over the past four-plus years.

The final pre-seed investment volume for Q2 2026 will be revised upward as more data is entered into our system. But 2026 is already slightly ahead of 2025 in terms of total pre-seed cash invested during the first half of the year.

Even with the increase in average check size, few pre-seed deals exceed $2.5 million. The ones that do typically involve ten or more instruments stacked together. At the 90th percentile, valuation caps on SAFEs larger than $2.5 million can reach a shocking $100 million. This trend is largely tied to investor enthusiasm for AI companies, which have captured half of all pre-seed dollars so far this year.

Top 3 findings for Q2 2026

The average size of pre-seed SAFEs/notes reached a new high. As larger amounts of capital go towards fewer companies, the venture capital industry’s big early-stage bets are getting increasingly concentrated. More dollars invested on fewer instruments pushed up the average instrument size in Q2 to a record high of $276,000.

The AI hype continued, but is perhaps plateauing. The share of pre-seed dollars invested into AI startups is holding near 50%. AI companies captured 49% of all pre-seed dollars in H1 2026, essentially matching 2025's full-year figure of 50%. While there has been a noticeable increase in AI’s share since 2021, the past six months did not see a continued rise.

Texas overtook New York, and the Austin metro ranked third in the nation. Startups based in Texas took in 9% of pre-seed investment in the U.S. in Q2, second only to California. New York fell to third in the state rankings. In terms of metro areas, the top three in Q2 were the Bay Area, New York City, and Austin.

Key trends

SAFEs

Convertible notes

Industries

Methodology

Carta helps more than 50,000 primarily venture-backed companies and 1.7 million security holders manage over $4.5 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 August 10, 2026. It encompasses 370,000+ convertible instruments raised by more than 27,000 startups in the United States from Q1 2021 to Q2 2026, with a focus on the 11,000+ instruments raised by 3,000 companies in Q2 2026.

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.