State of Pre-Seed 2025 in review

Carta

Hamza Shad

Research

22 Pages

Pre-seed startup funding in 2025 exhibited a concentration of capital, with fewer overall instruments issued but some companies raising massive amounts.

Key Takeaways

Concentration of Capital: 11,672 SAFEs and convertible notes were issued in Q4 2025, the lowest in recent years. However, those instruments represented $2.62 billion in investments, which is similar to the last several quarters.
Pre-priced Funding: Founders are raising larger sums of money on convertible instruments before switching to priced equity. In 2025, the majority of early-stage rounds under $4 million were completed using SAFEs or convertible notes.
Founders building in atoms: While SaaS remains the largest startup industry, hardware and biotech/pharma finished 2025 as the second and third largest by total cash raised. This is a noticeable difference from 2024, when hardware was third and biotech/pharma was fifth.
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