The Raise Report Special
Securing (Pre) Seed Funding in 2025
Since we started releasing this data we have covered almost 800 funds that have raised over $240b of fresh capital to deploy. Money does not seem to be an issue, getting out of those investors is, but why is that?
🌱 Proof Over Promise: Securing (Pre) Seed Funding in 2025
In 2025, securing pre‑seed and seed funding has become a real challenge. Even with vast sums parked in venture funds, inboxes stay quiet and only the sharpest pitches get through. Here’s what’s changed—and how to adapt your early‑stage raise.
💼 Dry Powder vs Deployment Drag
Global venture funds are sitting on around $650 billion of unspent capital (about $308 billion in the US), yet in 2024 they deployed just 15–18 % of it. Angels and micro‑VCs who closed fresh vehicles last year are tip‑toeing through diligence, stretching out closes and benching large chunks of their war chest. The result? Even a standout pre‑seed story can end up sidelined while investors double‑check every metric.
(Of course, you’ll still hear the occasional “I wrote a cheque within a month” tale, but those are the exceptions, not the rule.)
🔍 Fewer Funds, Fiercer Competition
Since 2021, some 25 % of US VC outfits—especially the micro‑funds writing early cheques—have shut up shop. You’re now pitching to a smaller group of active seed investors, each scrutinising dealflow more closely. Your pitch needs to be sharper than ever, because there’s simply less room at the table.
🤖 The AI Goldrush
If you’re in AI, you’ll still find eyes on your every move—over 50 % of Q1 2025 seed rounds went to machine‑learning plays. Clean energy and Web3 are hanging on, but they’re fighting for crumbs against data‑driven tooling. If your startup sits outside these buzzy sectors, you’ll need unarguable traction—users, pilots or revenue—to stand out.
📉 Valuation Compression
The froth of 2021 is long gone. Pre‑seed caps that once flirted with $10 million now sit closer to $5–7 million, while seed rounds hover around 8–10× forward revenue. That squeeze reflects angels and seed funds protecting their markups in a market where exit windows remain narrow.
📨 Cold Email Freeze
In 2025, cold‑email outreach has become a real uphill slog: average reply rates sit at just 4 %—down from nearly 7 % two years ago—and only the most painstakingly personalised campaigns ever crack 40–50 %. At the same time, AI‑driven spam and phishing have surged by over 1,000 %, forcing inbox filters into lockdown. With genuine pitches now drowning in a sea of bulk messages and defences on high alert, cold emails barely make a ripple, making it demonstrably tougher to win attention without a prior introduction.
🔮 Navigating 2025’s Early‑Stage Funding Crunch
2025’s pre‑seed and seed market demands razor‑sharp focus. Here’s a stripped‑back playbook:
🤝 Lean on Founder Communities
Your strongest warm intros come from fellow founders. Plug into peer networks—online forums, mastermind circles or meet‑ups—and watch your pitch land in the right inbox.🎯 Precision Targeting
Use AI to shortlist groups of 10–15 investors whose thesis and activity match your stage and sector. Then personalise each message yourself, leading with hard traction (user growth, pilot deals, early revenue).💡 Back Micro‑VCs & Syndicates
Small funds and angel groups specialise in seed rounds. They offer capital, mentorship and follow‑on introductions—often more valuable than a cold cheque.🔗 Join Curated Pitch Events
Sector‑specific demo days and invitation‑only gatherings pair you with a hand‑picked set of investors, cutting straight to meaningful conversations.✍️ Publish Thought‑Leadership
Share concise, data‑driven insights on LinkedIn or niche newsletters. Smart commentary on your market or a quick case study can put you on investors’ radar without a single cold DM.
Key to success? Proof, not promises.
Demonstrate traction: Real metrics beat vision alone.
Show your roadmap: Spell out how this round fuels seed‑plus or Series A.
Choose wisely: A few well‑aligned cheques trump scattergun outreach.
The overall trend is clear: precision and personalization—plus “proof over promise”—are winning the day for early-stage founders in 2025
When markets eventually calm—whether through easing rates or more likely understanding where the AI tech breakthrough is taking us —those who navigated this narrow window will sprint ahead. Until then, focus on AI and Customers, perfect your proof points and do the investor work before you pitch.
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it is probably time to do so.
For the ❤️ of Startups
✌🏼 & 💙
Derek
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