Banking startup Kernolab inks $1m in pre-seed funding
Banking startup Kernolab inks $1m in pre-seed funding
Lithuanian FinTech Kernolab has raised $1m in a pre-seed funding round headed by venture capital firm Lighthouse Ventures.
$1 7m PRE Seed Funding for Immigrant Banking App B9
What Is Pre-Seed Funding and How Does It Work?
What Is Pre-Seed Funding? In this video, you’ll learn everything you need to know about pre-seed funding, VC funds, and VC-backed startups.
00:11 Pre-seed funding
00:57 First check into a company
01:57 Reason for valuation
04:20 Cool thing about pre-seed funding
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Pre-seed funding’s like this super awesome new asset class in the venture capital world and funding option for startup founders, and really early stage startup founders. The interesting thing about pre-seed is like maybe like five years ago all the VC funds, maybe 10 years ago, the VC funds started going upmarket. So traditional A, series A players, like all the famous Sand Hill Road funds wanted to kind of wait a little bit longer, and make sure the company was doing well before they gave them money, but they would give them more money, which then helped the seed funds emerge. And the seed funds used to be like the first check in and get things going, but then they started waiting a little longer and doing two or three or $4 million rounds.
And so there was this glaring opportunity in the earliest stage possible, which is like the first check into a company. And some very smart fund managers decided to pursue this, and they branded it pre-seed, and it’s been super successful. There’s a lot of really good pre-seed funds now. We’re actually seeing the pre-seed funds raise you know, they’re, like $50 million funds now when they used to be like 10. So even they’re growing. But for founders, this is really awesome because really pre-seed is there to like, the smallest check possible that can kind of get you going, and help you build something that can then prove out your idea. So some people call this product market fit, but I’d say it’s even not product market fit. It’s probably more like minimum viable product, like a simple SaaS solution that everyone can see, oh this is actually going to be helpful, or maybe get a couple customers to sign up for it. Or for like drug development, you find that you maybe can like actually start working on a compound. Or for health tech, you build like another minimum viable product that like a health system likes. So just like the very basic stuff.
Now interestingly, pre-seed is really for kind of like, I kind of joke, it’s for the non-famous non-repeat founders. And the reason for that is if you’re like a famous founder, or already done an IPO, or been successful before, you’re probably just going to go right to seed, or even right to series A, and just raise a big chunk of capital. And it’s real simple, just kind of market demand, like VCs, everyone, angel investors, love backing founders that have done it before. Beause you just learn a lot on that roadmap, even founders that maybe weren’t successful, they have sometimes an easier time raising money than first time founders ’cause they can talk about all the things they learned, and they know how to talk to investors, and have run board meetings and built something.
And the reason for that is the valuation is just so low. But, the goal remember is to take as little money as possible that can let you prove out your idea. So we often at Kruze see pre-seed rounds being like $500K, a million bucks, something like that. And the valuation is usually like somewhere around $5 million, a little bit less, a little bit more, but so you’re still kind of selling 10 or 20% of the business, which is a lot. That’s a lot of dilution for, you know, a million dollars say. But again, this is kind of like for founders that really need that shot, and the seed or series A market isn’t open to them. So you take the money, and the beautiful thing about taking that money, and you do suffer the dilution, but you’re in business and you control your destiny. And if you build something awesome, then you are easily going to be able to get follow-on money.
What is Pre-Seed Funding? (Finance Explained)
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How to Raise Pre-Seed & Seed Startup Funds – Intro
Less than 1% of startup pitches result in funding. While most entrepreneurs over-emphasize pitch decks, smart founders focus on fundability. Successful founders follow a proven five-step process to efficiently raise Pre-seed and Seed funds for their early-stage startup. This webinar replay dives into important keys to raise early-stage funds, including:
2. Due diligence and legal pitfalls
3. Financial projections and models
4. Funding strategy
5. Inflection points and funding milestones
6. Idea validation
7. Traction metrics
8. Pitch effectiveness and tracking
9. Negotiating term sheets
Attendees will learn the Prepare, Plan, Execute, Sell, and Close (PPESC) process to effectively build a fundable startup and close Pre-Seed and Seed funding. Watch all 6 videos to get the entire class!
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