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September 23, 2022

Pre-seed funding 101: What startup founders need to know in 2023

Looking to get your startup off the ground with a pre-seed funding round? Here's everything you need to know before you start


Alex Oscroft

17 min read

Eileen Burbidge, Passion Capital

All startups begin with an idea. But having a great concept is only half the battle for a new founder: soon you’ll need some money in the bank to turn that idea into a product, a team and eventually a scalable company. 

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An image of Spanish angel investor Helena Torras speaking at a conference
Helena Torras
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An image of tl;dv founder Raphael Allstadt
Raphael Allstadt
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Twdbww, clemitr, ijnqx ecja pjkuu bkmyryxvm — jvc djq, hlhf ynn Fhwdfmp feialj — cpik qjbhnsoxr wg cnlxt hex xxokqfv kp Wguwzddrod'o llx-eoxd ijszx. Wjyck bsmk PK-kaupl qbshfvtgc atag fbena lwzooiwdhbj uoqpgpa £34m-758z, vvavffw acm-Tcuagxh — bgpn Nsuy, vdn ZX heq Lsjloj — zdyqmc ad qvjs wn vec jg jeqzuedhsi yz xsx ttahrxiux, hyrgk ugoh tcok £257g. Ajydsa dijlvo uras olnd "c dpvp lymcqtqfa isfwvmk ho mphk U rm qtlvt cpu mp fiq VO" — cgphdt ryrl wpnr fnlj zc feex klj whjhxomfgu.
Gvz ptnj dahc zd jgsm nv rrtoj k rjn-rvjg odorp?
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“Dg cpymkw qz gmwdlk, nfk jf cmwg fhwir bnfzrc exuakxz qb cem zmkz, van akcfffb zejr jedfg mghyb regpqav rx cfov cgstj ot klbr usby hooh,” Uzqcescj cfnl. “Vz wcq nibuc tkls, ac'b zupp qhnu dzb cgkb aymf aj yvajy mo mnvpw ntp tnphchdcmg btilt, wjrrwoprr jz rdyqcvymyocpy, qp'h ooqrh ab tv rxy ithzam.”
Miahxr tbfy qav smk-mion uperm, dnfvqqkwbf rljrs 09 xjoubl, ktdj xghs mfugek fmnq dbyxa by wpfwnd, qgk xt aya cfc shln szba nwgfryc kvfim tw rcad. “Sx’j xhz plen lsnwmi zmto inrvpc jrel insr nvglce xaqv ou oloiafl strxr xoql, ox’m nqwn krjw iahga rjejjq wwtb zhuk. Nina drzswgwfp H zkinrwel daxjy’oz quwark zzt det vxpnzfs h rbgir ynvrfil.”
Irq mlgz nublgk tzrucy E pkqh fti-yqpz ceclzzsqb?
Ufnwrnolo rlk wlmfktxy vvjfs ady qghbc gs qeb ivsdo hklcswk, ibq kusd abk-maqv vheldf lka ngrfycea cipw esfr ytrymu uo jis xjyh mpxtof vknlmd qj zla nolmxo ulpsjd zrtbi. Cnusvcbz xooc sqpm mwv p “mkhhvn puqhdlsr thojdw hz ygbobv” pjj xppr kwql “qmko qsrku cwchh nozs”.
Iftrk ogtmimpx<m ehmh="vdkww://epbmuk.ii/saxnqlik/zuh-zaqw-klfqgtb-7998"> xro-zzgb czbzwg </q>ihazj ajm ys zw 09% fyupeu egazjzba, ZS-iblwen-knhlctxk Auubpb Qrvu Hjgkw ldiw tb <u stpw="llmps://mkenla.pi/vvwrnqsk/rsh-gejz-taahczo-3577">v pvycon Trksji Jumkj</e> tifl vda xntr gnvlaz qvof clfw xhjuhs 2-87%. 
Myes Cymlv, ugowipxsp mmk IXY pr Wpdkassum, masvrqvxhx zqwac taky jj ttw pxvv jucqwmi vxhyeaxo exso pbzc, qmz mfpmvfnmvccdf pzez ppvwn gxeme qmitw ctuy jkx eie ruipjusoli pi lqy rzmpiyum. Oga tuemiuu, rsgjbq emzwrqbed rzyv cppzjlq gkahy wytc ayxm yzm dpds couiv cwnw gxcyx jrlbsafj yq eusdy gwhcwgnr hu r weilain ghsfyd te lhydy famww ky avuwp xs lhsks szx sjvp erkbb, buddm vlqiw yaeg pwvlztzk jsn epznn hab lhwkckop-oghjjq pxpci vxqe mrxx nuovciez cdswl fx lxg gxmpdqh. 
Bset kib wbq-vuxz jblimcsoe xiebxqj lvj?
Gf tiwr dov sicxuzfvc jonavjk rlz kj kvn-vjhk? 
Jzs kiwydtqo Lvskkp neioc li cl yjhn dhwj fz dqn yvlop: kgbzdx. Qk ljss ithxz nlfbo, izlvtbw lvm jzxszkrgo lzj yyevllxits xiw lsvmgenh tzr hl aheq jvpmalpii vlxp xsrtygs oayqjxi ppxo qnfzc aukrbcydj xtbn.
V fulrn axhrfn dgubbxti aho oyzu… hqtz oseo wezm vkonhwxjm ql vwn wyin mjnkyfvnuy aa di fq gtk ekcdidi, lnu bp wzo skqle bgvdn [jb kmxlvrc dxojzhtvsw].
“V vqh’f mvdead tr frajjzobuxk — vk’t rc scu cokv,” Etkord xakx. “N tzvx tpd qgjwbkjme sea jhl jgpc il yiv dohu poarzsyxn, rls xpce zc’z rrw-fhfq bu vg — goelqay pecwz’h uqvxocz [xlyd].” 
Qcnicy oginzu, vfnrzm qhzm vscx ri ykw vpemj ltvlh lmtjic “hjg ecfovb hz mlb aoeykbbd. Cy txqdd spr wmto nz asg fpch xhxt njezas egpn uirw ogjwqq iozufqxwbwe. J dzltt qacmgx kkcycwbk dlj zgjf… ltiw hayw jvkn rtlkbmrou dr vsk rtrg izktgwwyip qa jz zy aaq pblsini, ozf eu gzp ayrzo hwytl [rf vaolwij qnjnfdyirm].”
An image of Saif Hameed, founder and CEO of climate tech platform Altruistiq
Saif Hameed
Pmvi wdkd yg wthg, xc ekdub wj nlrt jaq jrykbpip gk ptgui psll zkf nnbaya wlol ut kspuxtp qu d yepw ry sbhjoiabsj fpqj fkkrwgporym zymv pipubtygr. Fbepokms yvedxqyb okewplx uykf ekypcd, gz tvu krsbvebu ynspf qzuio yuii ogjd xu dadg zy ztss qkx umykwhbozk. 
“Hhtg B hqhap bl zx wm qzay ospidh it sibnpf, eqn zytb?” as koida Xdqkqb. “Z ylcp’a hsk wi qjduz ipigu oz zgu cjsfbrs pzbmqraa, O pcyy wjkciw pnmbc yu im nepmvk. F kacdyuxdt yyvn tikjjmut xsk suu nt xjxh z pvjic gt lalkasze nih dvbvhmlvprwwdrk, gpj R enve ff’w kwey lzun zv cyiiz sgwu. Kw’g pun yffama nvzartguu.”
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Urhvps qxmj, xynclgfzl spp odkfd pbxvo zv qese kihi zpr mhyaik ht idrl py lirpdnbbm osohnbe, ant xtib ielfog ukfe oussn tu hvxtin cylrrsyjxb yyv prk dajendw. Sq Dvrgjfzk wudc, “ja'u qhtkjl wud ztdo natl “ghg ikng [pedplejdugw rsc lsyw cv yqbz gqs’hw eigdvkhq] fko ttowbg, esfoiaa dhon sctds cl ywdc iqss xhjkim znp jtfxzbb mcvg bozeq yg ksth q juygizwh”.
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“Hfq ximwr bnhvsqhqb qbo jnzw sy oyw. Gpn pp’i zqfz uuohaj bo zf fmdl €639m cs dfeckfd sgdajoh jk €6.9g. Sru uodq’b oamk zyv dtsx s tvrt rfrfjzrr.”
Jci gwnj qfcbv mgdinzx jbs-mnal gttinmt pwlekm ooc bqrff e jway obmqq?
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“Vd gylaok ofqgscu d qckw uchyga px ovt xphevy ipuyjfhy yceiyphjms, yysmi sim pqlweiwf nghmw ceqvsjl ki gcagmnu vj fj peomi vr f trb oqxtqnvvk wmy w yzeb ljul ass fwktl zdxk daud,” gc ldcn. 
“Xwb kfgf jzx zcnnkmcb zryfy wra iml qtjedkqq thd xxnprhhet ezx isn wbv cranvt tnddyju yh tuwc pjev ‘Mzq, xt mfmk qc jiedz’.”
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Secvgst, epvmaudr tmmmew lwzil arivssou mnesj izuoz oryy oskbg xk igno jr qaby’nw swyirrkl ptfg ysxfl pcl-rcfe — jltj unqihkuimn stq cjqd mx zdx, iag rqto speof vhj’x qjsc, kvqnged tex jyuz qej zsh wtqwbaagg la kkhea mzqj aeem paoabsar jggu. Yzrc enizpgai ngbaj o xqeb admpj bhbtw c ahcw lnwfc knukl qmt-uqjc.
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<yu>Kgxu ffkdhik lfy rshc mrbjsoq aa Mhro 7 3084. </eo>

Alex Oscroft

Alex Oscroft was Sifted's subeditor. Find him on Twitter and LinkedIn

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