If you’re just beginning your journey as an entrepreneur in the pre-seed startup round, competition can be fierce. It’s crucial to know how to go about gaining support so you can go from pre-seed to fully funded startup with plenty of venture capital backing your product. Read on for seven of the best tips to succeed as a pre-seed startup provided, in part, by our friends at Y-Combinator, Crunchbase & DocSend.

Pre-Seed Changes

Several years ago, pre-seed companies needed a minimal PowerPoint pitch deck and a solid idea to present. Beyond that, they required very little to secure funding for their venture. Today, things are quite different, and demands on startups in this round have risen dramatically. If you want to succeed in this arena, you’ll need to be prepared. Here are the facts and figures you’ll need to run a successful pre-seed campaign for your fledgling company.

Pre-Seed Doesn’t Equal Pre-Product

It used to be enough for pre-seed companies to show VC investors a pitch deck with a few slides and a solid concept. Not anymore. Now, investors are looking for more than a deck and concept. They want to see a live product. Your idea is a great thing, but it doesn’t tell investors that you’re serious. If you already have a live product, VC investors will be able to view you with much more confidence that you’re serious, and you’re putting skin in the game. Get a product live, then go for your pre-seed funding.

On average, only 10% of startups with no product will gain venture capital investments. Around 20% of startups with alpha products can gain investors. However, over 30% of startups with beta or live products gained investors during their pre-seed round.

Pitch Decks Are Still In

Do you need a pitch deck for your VC investors? The answer is still a resounding, yes. The decks themselves might be changing slightly, but you do need them. Here is a breakdown to help you create the most successful and impactful pitch deck possible.

When it comes to successful pitch decks, there are a few rules successful startups follow. First, short is sweet. Investors aren’t going to spend endless time on your pitch deck if you have a million slides. They want a visual and an explanation that is short, sweet, and to the point. While you may not need every slide, here are some universal slides that investors spend time reading.

The Problem

Explain the problem that your product or service solves. This is the “why” you exist. Answering why people need your product or service answers the question as to why investors should hand you money to make it available.

Why Now?

Briefly answer why this is the right time for your product to hit the market.

The Solution

How does your product offer a solution to the problem you discussed earlier?

Your Product or Service

Investors want a product they can look at, touch, and experience. A concept on paper isn’t usually enough anymore. To position your startup at the best place possible to gain the capital you’re seeking, you need a working prototype of your product. You’ll get loads of bonus points if you can already be at the production phase. Going into production before you have the majority of your seed money may not be practical for some. However, a full product is becoming the norm during VC pitches.

Your product is, by far, the most crucial part of the entire presentation. If you have a solid presentation and every slide is perfect, but you lack a product, investors are going to find your product a hard sell. Investors want to see, handle, and experience the product they are going to invest in.

The Competition

Briefly outline who else is in the market and the space available for your company.

Your Team

Investors want to know who the brains are behind the product. Briefly state who each key member is (shouldn’t be more than three) and their role.

Your Business Model

Make this slide clear and concise.  Explain the model you’ll use, but there is no reason to over-explain. If your model sounds convoluted or confusing, you’ll lose your potential investors’ interest and attention.

The Financials

Again, be brief. State basic facts such as base cost per product or service, net profit per unit, and cost for production.

Your Fundraising Goals

State the total amount you need to acquire.

Pre-Seed Takes Time

You have a fantastic product. You’re excited about it, and you think the world should be excited, too. There’s nothing wrong with that! However, it’s essential to bear in mind that the pre-seed round still takes time. Meetings don’t happen instantly, and every meeting you gain won’t turn into investments.

Pre-seed rounds take anywhere from six to twenty-five weeks for startups. On average:

16% take 1-6 weeks

30% take 7-12 weeks

12% take 13-18 weeks

18% take 19-24 weeks

24% take 25+ weeks

If you find your startup struggling to get out of the gate, take heart. Eighty-four percent of all startups take a minimum of seven weeks to go beyond their pre-seed round. You’re certainly not alone.

Pre-Seed Statistics

As you start your pre-seed journey, it’s helpful to bear in mind that you are one of many companies all vying for investors’ attention. There is plenty of venture capital to go around. However, knowing what an investor is looking for is critical in gaining their favor and their investment. It’s also helpful to know where along the spectrum your team is landing in the averages of pre-seed rounds. Here are some useful numbers to keep in mind during the process.

Meetings

When it comes to meetings, you might be tempted to think, the more meetings you get, the more money you’ll raise. This isn’t necessarily true, however. If you’re landing meetings but struggling to gain substantial investments, rather than signing up for more meetings, reexamine your process and figure out what’s not working.

Highest VC Average Raised = $511,522 in 26.61 meetings

Middle VC Average Raised = $273,443 in 33.92 meetings

Lowest VC Average Raised = $195,085 in 19.43 meetings

Team Member Age

This isn’t something you can change; however, it’s good to know the numbers. Statistically, those in their 30s and 50s raise the most during pre-seed rounds. Those in their 40s, followed by those in their 20s, raise the least. Those in their 30s land the most meetings, as well.

Team Demographic

Statistically, the numbers are telling when it comes to how potential investors view team member demographics. Teams with a mixed male-female team are received well, as are all-male teams. All-female teams, however, while given meetings struggle to raise the capital.

Total amount raised according to team demographics:

Mixed = 2.5 Million

All Male = 3 Million

All Female = .75 Million

Team Location

The location of your team also influences the potential to raise funding for your project. Here are average amounts raised according to regions of the United States.

Midwest = $842,040

West = $514,161

Northeast = $239,939

South = $319,115

Numerous Pre-Seed Factors

As you can see, success during a pre-seed round depends on numerous variables. While you may not be able to control all variables, such as age and team demographics, you can control your presentation, preparedness, and product presentation. Do all you can to impress the investors in your meetings, and you’ll be able to let your product do the rest of the talking for you.