The short answer. A pre-seed round funds proving that the problem exists and the product gets real usage; a seed round funds proving that the business can grow. At pre-seed, investors mainly back the team and the first signals; at seed, what already works. Business angels invest in both, often alongside others; early-stage funds come in mostly at seed.
What you'll learn
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What each stage is, what the money is for and which milestones close it.
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Who invests at each stage: friends and family, business angels, networks, accelerators, funds and public funding.
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What you're asked for as proof, as numbers and as documents.
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Which instruments are typically used.
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Reference figures from Spain and from the US, and why they can't simply be compared.
Knowing which stage you're at is the first step in preparing your round properly (How to prepare a pre-seed or seed round). Pitching as seed what is really pre-seed, or the other way around, is a mistake that tends to pile up "no"s.
What's the difference between a pre-seed and a seed round?
Definition A pre-seed round is a startup's first outside funding, usually before it has a business that works repeatably. A seed round funds the move from first signals to growth you can demonstrate.
| Item | Pre-seed | Seed |
|---|---|---|
| What the money is for | Proving the problem exists and the product gets real usage | Proving the business can grow repeatably |
| Investors mainly back… | The team and the first signals | What already works and can scale |
| Market proof expected | Pilots, early usage, letters of intent, first customers | Customers who pay and come back, a revenue trend |
| Numbers | First metrics and a clear cash position | Revenue, retention, cost per customer and margin |
| Documents | Company, capital and IP basics | A fuller data room, with history |
| Milestones that close it | Product in use, first customers | Recurring revenue and a channel that works |
A word of caution The names aren't rules. Every market, sector and investor uses these labels in their own way. What matters isn't what you call your round, but that what you ask for matches what you can prove.
The stages, from idea to Series A
- own funds
- friends and family
- business angels
- accelerators
- public grants
- business angels and networks
- early-stage funds
- venture capital funds
Who invests at each stage?
| Investor | Usual stage | What they bring | Worth knowing |
|---|---|---|---|
| Founders, friends and family | Before and during pre-seed | First capital, trust | Always put the investment in writing, with the same rules as any shareholder |
| Business angels | Pre-seed and seed | Their own money, experience, contacts | They invest moderate amounts and often co-invest (What business angels look at) |
| Angel networks and clubs | Pre-seed and seed | Several investors, a process and sometimes a lead | They want a format their committee can compare |
| Accelerators and incubators | Pre-seed | A program, mentoring and sometimes capital | Some take equity in return (For accelerators) |
| Public funding | Pre-seed and seed | Loans and grants without giving up equity | In Spain, ENISA, CDTI and regional programs; they often require own or private funds |
| Early-stage funds | Mostly seed | Larger amounts, support for the next round | More process, more paperwork and higher expectations on numbers |
How much gets invested at each stage?
It depends heavily on the country, and don't mix benchmarks.
In Spain, the Business Angels 2025 report by AEBAN and IESE shows that in 2024 the median invested per business angel was €20,000 over the whole year, while the average was €95,525, pushed up by a handful of large investors: leaving out those who invested over a million, the average drops to €45,365. That's why angel rounds usually bring several investors together.
In the US, the figures are on another scale. According to Carta, the median pre-money valuation of new seed rounds on its platform reached $16 million in the first quarter of 2025. And at pre-seed, post-money SAFEs in rounds of $250,000 to $1 million had median valuation caps of around $10 million in 2025.
| Reference | Market | Figure | Source |
|---|---|---|---|
| Median invested per business angel over 2024 | Spain | €20,000 | AEBAN and IESE |
| Average invested per business angel in 2024 | Spain | €95,525 | AEBAN and IESE |
| Median pre-money valuation of new seed rounds, Q1 2025 | US (Carta) | $16 million | Carta |
| Median valuation cap on post-money SAFEs of $250,000 to $1 million, 2025 | US (Carta) | About $10 million | Carta |
The figures measure different things and come from different markets: they're shown together only to illustrate the difference in scale.
How to read it. If you prepare a round in Spain or Latin America using Silicon Valley numbers, you'll ask for a valuation your market won't recognize. The reverse holds too. Use benchmarks from your market, your sector and your stage. (How much to raise in your round)
Common mistake Reading the average seed round size on a US blog and setting your round from it. What works in one market can close doors in another.
What do they ask for at pre-seed?
At pre-seed, investors back the people and the first signals above all. What an investor wants to see:
- A team that can deliver: someone who builds and someone who sells, with real commitment.
- Proof the problem exists: documented conversations, pilots, waitlists or letters of intent.
- A product someone uses, even if it's a first version.
- A clear plan for the money: what you'll prove with it and how long it will take.
- A clean company: orderly capital and IP owned by the company. (Pre-seed and seed data room)
Tip At pre-seed, small but real traction is worth more than a big forecast. Ten paying customers say more than a spreadsheet with a million users in three years.
What do they ask for at seed?
At seed the bar goes up. It's no longer enough to show the problem exists: you have to show the business can grow.
- Customers who pay and come back, with a revenue trend over several months.
- Unit economics that work: what it costs to win a customer versus what they bring in.
- An acquisition channel that works and can be scaled.
- A growing team with the key roles covered.
- A plan to the next round, with measurable milestones and the cash to get there with room to spare. (Runway and burn rate)
How much time passes between one stage and the next?
More than people usually plan for. According to Carta, the median time between a seed round and a Series A reached 616 days, a little over 20 months, in the second quarter of 2025. It's data from its platform, which is US-focused, but the lesson holds in any market: the money from one stage has to last until the milestones of the next, and then some.
That's why you don't choose a stage only by what you have today, but by what you'll be able to prove when that money runs out. (Runway and burn rate)
What changes in your pitch from one stage to the next?
| Part of the pitch | At pre-seed | At seed |
|---|---|---|
| Problem | Proof it exists and who has it | How much reachable market there is and how you get to it |
| Solution | What works today and what's missing | Real usage, retention and what customers ask for |
| Traction | First signals, pilots, letters of intent | Revenue series, returning customers, cost per customer |
| Team | Why this team for this problem | Who joins and which roles the round covers |
| The ask | What the money is for and what it will prove | Milestones to the next round, with a cash plan |
| Risks | Which assumptions are still unproven | What could hold growth back and how you cover it |
Investors' questions change too. (The questions an investor will ask you)
What about sectors with long development cycles?
In health, biotech, hardware or food, the stages don't always follow the revenue pattern. A startup may need years and several rounds before it sells anything, because it first has to develop, certify or win approvals.
In these cases, what closes each stage isn't a revenue level but technical and regulatory milestones: a validated prototype, a certification, a trial, a health registration. What's asked of the founder is the same as always, adapted: each milestone has to be defined, costed and dated, and the cash has to reach it with room to spare. And the investor has to be someone who understands those timelines.
Tip If your sector has long development cycles, look for investors who specialize in it. A generalist investor will often measure you against the timelines of a software business, and you'll almost always come off worse in that comparison.
How do you know which stage your startup is at?
Pre-seed or seed?
A guide, not a rulebook. You can print it.
How to read it. If you tick only the first or the second, you're at pre-seed. If you tick almost all of them, you're probably at seed. If you tick none, your round is early pre-seed or friends and family: focus on proof that the problem exists. (Is your startup ready to raise?)
Can you skip pre-seed?
Yes. Some startups fund their early stages with their own money or revenue and reach their first round already at seed, with better numbers and better terms. Others never raise: they grow on their revenue. Neither option is better in itself. The question is what you need to reach your milestones, and at what cost.
What are the common mistakes when choosing a stage?
| Mistake | Why it stalls the round | What to do instead |
|---|---|---|
| Pitching as seed while at pre-seed | The investor sees an ask your proof doesn't support | Match the ask to what you can prove |
| Using another market's benchmarks | Valuation and amount out of place | Use benchmarks from your country and sector |
| Pitching seed funds at pre-seed | You collect "no"s on fit | Start with angels, networks and programs |
| Not formalizing money from friends and family | It complicates the cap table and later rounds | Document it like any other investment |
| Giving away too much at pre-seed | It leaves little room for the rounds that follow | Raise just what the milestones need |
Do it with a method Where does your startup stand against what's expected at your stage? The Startup Index Score evaluation compares you with what investors at your stage look at. Free: your level from 1 to 5 and your first three priorities, in 30–40 minutes. (Start the evaluation)
In short
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Pre-seed funds proof that the problem exists; seed, proof that the business can grow.
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At pre-seed, the team and the first signals weigh most; at seed, the numbers and the trend.
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Business angels invest at both stages; funds come in mostly at seed.
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In Spain, the median per business angel was €20,000 over 2024: rounds bring several investors together.
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Don't use another market's benchmarks to set your round.
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What you ask for has to match what you can prove.
Do it with a method Check which stage your startup is really at, and what it's missing. Evaluate your startup with Startup Index Score: free, in 30–40 minutes. (Start the evaluation)
Frequently asked questions
What's the difference between pre-seed and seed? A pre-seed round funds proving that the problem exists and the product gets real usage, and investors mainly back the team. A seed round funds proving that the business can grow, with customers who pay and come back. The labels vary by market and by investor.
Who invests in a pre-seed round? Mostly founders, friends and family, business angels, accelerators and public funding programs. Venture capital funds come in less at this stage. In Spain, many business angels invest alongside others or through networks that share the risk and the review, which makes it easier to fill a round.
Do I need revenue for a seed round? In most cases, yes: at seed investors expect customers who pay and come back, with a revenue trend over several months. There are exceptions in sectors with long development cycles, such as biotech or hardware, where technical and regulatory milestones carry more weight.
How much does a business angel invest in Spain? According to the Business Angels 2025 report by AEBAN and IESE, the median invested per angel in 2024 was €20,000 over the whole year, and the average €95,525, pushed up by a few large investors. That's why rounds usually bring several investors together.
Can I use US figures as a reference? Very carefully. Valuations and round sizes in the US are on a different scale from those in Spain or Latin America. Using them to set your round usually leads to asking for a valuation your market won't recognize. Look for benchmarks from your country, sector and stage.
Keep reading
Sources
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AEBAN and IESE, "Business Angels 2025. La inversión en startups: actividad y tendencias": www.iese.edu/media/research/pdfs/78716.pdf
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Carta, "State of Private Markets: Q1 2025": carta.com/data/state-of-private-markets-q1-2025-full-report/
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Carta, "State of Pre-Seed: 2025 in review" (February 19, 2026): carta.com/data/state-of-pre-seed-2025/
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Carta, time between seed and Series A in Q2 2025: carta.com/data/series-a-fundraising-q2-2025
About the author
Jordi Gil is the creator of Startup Index Score. He has spent almost 30 years developing projects and working with startups across the Americas, Europe and Asia. (Meet Jordi Gil)