Introduction
While the total amount of pre-seed funding raised by startups continues to grow, the number of deals is falling. This has resulted in a concentration of capital akin to what we’ve seen in our recent data on priced rounds.
More fundraising transactions continue to enter Carta’s records, but Q3 2026 already has a confirmed $3.58 billion invested across 11,726 SAFEs and convertible notes in the United States. Based on the progression of data from previous quarters, we estimate that Q3 will finish north of $4.48 billion across over 14,600 instruments. That makes Q3 the largest quarter of 2026 to date in terms of cash invested, but the smallest in terms of instrument count.
Much of this pre-seed capital is going to AI startups—both software and hardware—in California. The healthtech, biotech, and fintech industries are also receiving substantial funding, though typically with lower valuation caps.
Key highlights from Q3
Valuation caps are rapidly increasing: The median post-money SAFE cap went up year over year for every round size tier. For bigger rounds, the growth has been particularly noticeable. The median val cap on a $2.5 million or larger deal rose 33% from $30 million in Q3 2025 to $40 million in Q3 2026.
The Western U.S. dominated fundraising this quarter: Unlike the smaller ebbs and flows in the geographic distribution of pre-seed funding over the past several years, Q3 saw sharp movement toward the Western census region. The West captured 68% of pre-seed dollars in Q3, up from 58% the quarter before. The Bay Area alone raised $1.7 billion—five times the next biggest metro area.
Most SAFEs convert at their val cap: Comparing companies’ highest pre-seed valuation cap to their seed valuation shows that a sizable majority of SAFEs convert at their cap. Only 29% of seed rounds raised in Q1-Q3 2026 by companies with prior SAFE funding result in a conversion below the cap, so in most cases SAFE investors receive their minimum possible ownership percentage.
Pre-seed market overview
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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.
