7 Ways to Secure Pre-Seed Funding in 2025

Raising pre-seed funding in 2025 is challenging but achievable with the right approach. Investors are cautious, prioritising startups with strong evidence of market potential. The UK offers unique opportunities like SEIS tax incentives and online funding platforms, but competition is global. Here’s how to improve your chances:

• Build a Targeted Investor Pipeline: Research investors aligned with your sector and use platforms like Crunchbase and Open VC. Timing and warm introductions are key.
• Leverage Government Schemes: SEIS/ EIS offers tax relief, making your startup more attractive. Advance Assurance from HMRC boosts investor confidence.
• Use Digital Funding Platforms: Platforms like Seedrs and Crowdcube connect you with a wider range of investors efficiently.
• Create Data-Driven Pitches: Focus on market size, traction metrics, and financial projections to back your claims.
• Plan Your Funding Round Structure: Set realistic valuations, use Advance Subscription Agreements, and balance funding needs with equity control.
• Tap Into Accelerators and Events: Join programmes like Techstars or attend events like London Tech Week to meet investors directly.
• Show Founder Credibility: Highlight relevant expertise, ensure your business is prepared, and demonstrate commitment.

Preparation, timing, and a mix of funding sources are essential. Combine these strategies for a stronger chance of securing pre-seed funding in today’s competitive landscape.

1. Build a Strong Investor Pipeline

Creating a targeted investor pipeline is crucial for maximising your fundraising efforts. Start by identifying investors whose focus aligns with your sector, stage, and financial requirements - this will save time and increase your chances of success.

Use platforms like Crunchbase and Open VC to research potential investors. Look at their portfolio, typical investment sizes, and recent activities. For example, technology investors are unlikely to fund hospitality businesses, and healthcare-focused funds won’t be interested in fintech startups. Reviewing their portfolio companies can give you a sense of their current interests and priorities.

Location plays a key role in pre-seed fundraising. UK-based investors often prefer working with local startups, as proximity allows for easier meetings and hands-on involvement. Many angel investors and early-stage funds focus on businesses within a manageable distance for regular check-ins, which can be invaluable when operational support is part of the deal.

Timing is another critical factor. Align your outreach with investor cycles, avoiding holiday periods or times just after major deals, as many funds operate on quarterly schedules. Reaching out at the right time can significantly improve your chances of getting a response. Launching in August or December aren’t always the best times!

Whenever possible, seek warm introductions through your network. Connections via colleagues, alumni, or advisors can often be more effective than cold outreach. Even a LinkedIn referral can open doors that might otherwise remain closed. This can’t be understated! Warm intros are so much more effective.

Stay organised by implementing a tracking system. Record meeting dates, feedback, and next steps to avoid confusion and ensure you’re prepared for follow-ups. Run this through a Google sheet or a CRM. This also helps you spot recurring themes in investor feedback, which can guide you in fine-tuning your pitch.

Focus on quality over quantity when building your investor list. A well-researched group of 50 relevant investors will likely yield better results than contacting 200 random names. Take the time to understand each investor’s thesis, preferred deal structures, and decision-making process before reaching out. This thoughtful approach sets the stage for leveraging government schemes and support in future rounds.

2. Use Government Schemes and Tax Incentives

The UK government provides valuable support for early-stage businesses, with the Seed Enterprise Investment Scheme (SEIS) standing out as a game-changer. SEIS is designed to make startups more attractive to private investors by lowering the risks associated with funding. It’s an essential tool in any well-rounded funding approach.

Here’s how SEIS works: investors can claim up to 50% income tax relief on investments of up to £200,000 per tax year. For example, if someone invests £10,000, they can reclaim £5,000 in income tax relief. On top of that, investors benefit from Capital Gains Tax (CGT) exemption on shares held for at least three years, a 50% CGT reduction on reinvested gains, loss relief, and Inheritance Tax relief after two years.

To boost investor confidence, it’s crucial to obtain Advance Assurance from HMRC, which confirms your SEIS eligibility. This step can make your business far more appealing to potential backers.

This only opens doors.

3. Access New Funding Platforms

The digital age has reshaped how startups find investors, moving beyond the limits of traditional networking. Online funding platforms have made it easier for founders to connect with investors they might never have reached otherwise. This shift has opened up fresh opportunities for securing capital more efficiently.

Equity crowdfunding platforms like Republic Europe and Crowdcube have become popular among early stage founders. These platforms handle much of the legal work involved in issuing shares and managing investors, making the funding process smoother for founders. You’ll normally need to have a meaningful portion of your round already committed and have a good social following/ network of people that you could push this out too but it is an option.

Angel investment networks link startups directly with investors. Using data-driven algorithms, these networks match founders with investors who have experience in their specific sector. This significantly increases the chances of finding backers who truly understand your market.

Before choosing a platform, take a close look at their fee structures. Some charge a commission on funds raised, while others offer performance-based pricing, which could be more appealing for smaller funding rounds. Also, consider the calibre of investors - platforms with higher minimum investment thresholds often attract seasoned investors who can provide strategic advice along with funding. These digital tools work hand-in-hand with traditional methods, paving the way for smarter, data-driven pitching strategies in the next section.

4. Create Data-Driven Pitches

Investors are not just looking for enthusiasm - they want solid evidence. A pitch backed by clear, reliable data can effectively demonstrate market demand and progress, making your case far more compelling.

Start with your Total Addressable Market (TAM). This number represents the overall opportunity within your market and helps investors grasp the scale of the problem you're addressing. Break your TAM into smaller components like SAM (Serviceable Available Market) and SOM (Serviceable Obtainable Market) to provide a realistic picture of your potential reach.

Next, include traction metrics to show early signs of success and alignment with market needs. Highlight key figures such as customer growth, revenue patterns, churn rates, and user engagement. These metrics prove that real customers see value in your solution and are willing to pay for it.

To validate your data further, document industry trends, user pain points, and gaps in competitor offerings. Conduct customer interviews to uncover genuine challenges and test whether your solution effectively addresses them. By focusing on real-world problems, you can build a stronger case for your product.

When summarising feedback from interviews, categorise it into three groups: positive responses, concerns, and feature requests. To address critical questions like pricing, use quantitative methods such as tallying positive responses or calculating average suggested price points. Tools like Dscout or Insight7 can help analyse interview data by identifying recurring themes.

Complement this with a thorough competitor analysis to identify areas where existing solutions fall short. This not only shows that you understand the market but also highlights untapped opportunities your product can seize.

Finally, structure your pitch in a way that builds momentum. Start by presenting market size, then move to customer validation and early traction, and finish with financial projections based on your proven unit economics. Keep your presentation clear and well-organised to ensure your data leaves a lasting impression.

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5. Plan Your Funding Round Structure

How you structure your pre-seed funding round can heavily influence investor interest and set the tone for your startup's future growth. Getting the basics right at this stage helps you avoid complications down the line and ensures your financial and legal groundwork is solid.

Start by setting a realistic valuation expectation that aligns with your current stage of development. At the pre-seed level, valuation is often based more on potential than actual revenue or product performance. It’s a balancing act: setting it too high can scare off investors and make future rounds tricky, while undervaluing your startup can lead to excessive equity dilution. Since pre-seed investors are betting on your team, your product’s ability to address a real problem, and the market’s readiness to embrace your solution, your valuation should reflect these factors.

When investors ask what the valuation of the round is, keep it simple and let them know that you’re letting the incoming investors negotiate with you on this. Setting it too early will only put people off before they’ve been able to build conviction.

Next, focus on structuring terms that attract investors while protecting your interests. In the UK, investors are often drawn to terms that qualify for SEIS/EIS relief. These government-backed schemes offer tax incentives, making your startup more appealing to potential backers. To simplify negotiations, consider using Advance Subscription Agreements (ASAs). These agreements allow you to delay setting a firm valuation while still potentially qualifying for SEIS/EIS benefits. An ASA is mainly used to collect a portion of the round in quickly then followed by closing a larger sum.

Even at the early stage of the business you’ll need to make sure your legals are in order. SeedLegals is a great go to for startup founders. They normally keep the cost of the transaction low and get in place the standard BVCA documents in place, which can reduce the time to negotiate. Ensure you have employment contracts in place, IP assignments, founder agreements in place as many good businesses have lost out on funding for poor legal structure.

Finally, strike a balance between funding needs and maintaining control over your company. While it’s important to secure enough capital, you also want to retain decision-making power to steer your business effectively. Most good investors will insist on Investor Consent on certain big decisions but beware if this starts to get too onerous.

6. Connect Through Accelerators and Events

While online platforms have made it easier to reach investors, accelerators and industry events offer a more personal, face-to-face approach to securing funding. These opportunities bring a human touch to your fundraising efforts, complementing the digital strategies we've already discussed.

Consider joining established accelerator programmes such as Techstars, Seedcamp, or Entrepreneur First. These programmes not only provide funding and mentorship but also connect you with influential investors through demo days and networking opportunities. They often require equity in exchange for their support, but the connections and resources they offer can significantly boost your chances of success.

Attend industry-specific events like London Tech Week, or niche conferences tailored to your sector. These gatherings attract investors who are actively looking for opportunities within your market. To stand out, aim to pitch or participate in startup showcases rather than just attending. These face-to-face interactions can lead to meaningful relationships that extend far beyond a single event.

Start building relationships early, even before you’re actively seeking funding. Regularly attending networking events like angel investor meetups, founder gatherings, or industry mixers can help you establish connections that will be invaluable when it’s time to raise funds.

Don’t overlook pitch competitions as a way to get in front of investors. Even if you don’t win, the exposure and feedback can be incredibly helpful. Many successful funding rounds have started with connections made at these events, proving their potential to open doors. However, never, ever, pay to attend one of these.

To maximise these opportunities, research the investors who will be attending, tailor your approach to their interests, and follow up promptly. This proactive strategy can significantly improve your chances of securing funding.

7. Show Founder Credibility and Business Readiness

When it comes to securing investment, it’s not just about the idea - it’s about you, the founder, and your ability to deliver. Investors want to feel confident that you can turn your vision into reality, which means proving both your credibility and your business's readiness.

Start by showcasing your experience that aligns with your startup’s mission. For instance, if you’re launching a fintech company, highlight your background in financial services, tech innovation, or navigating regulatory frameworks. This helps investors see that you have the expertise needed to tackle the challenges ahead.

Next, demonstrate that your business is operationally prepared. This includes having a strong legal foundation, accurate financial records, and a well-organised data room. Your data room should include key documents like registration papers, contracts, financial projections, and operational procedures. All of this signals to investors that you’re not just dreaming - you’re ready to act.

Building a balanced and skilled founding team is another critical step. Clearly define each founder’s role and ensure equity splits are agreed upon. If you’re the tech expert, consider bringing in someone with strong business development or sales skills. On the flip side, if strategy is your strength, make sure you have technical expertise covered. A well-rounded team reassures investors that all aspects of the business are in capable hands.

Market validation is a powerful tool to show your readiness. Even if you’re not generating significant revenue yet, early customer feedback can speak volumes. Share insights from interviews, pilot programme results, or letters of intent to prove there’s genuine interest in your product or service.

Be upfront about potential challenges and how you plan to address them. Investors appreciate honesty and a practical approach to problem-solving far more than overly rosy projections. It shows you’re prepared for the realities of running a business.

Lastly, demonstrate your commitment. Whether it’s through personal financial investment, the time you’ve devoted, or resources you’ve poured in, investors want to see that you’re fully invested in your venture. They need to know this isn’t just a side hustle - it’s your priority.

Investors at the pre-seed stage are looking for founders who balance big-picture vision with the grit to execute. By showing you’re ready, both personally and operationally, you’ll strengthen your position in the funding process and build trust with potential backers.

Conclusion

Securing pre-seed funding in 2025 demands a mix of strategies and an understanding of the current investment landscape. The key themes we've discussed earlier all point to one thing: preparation and adaptability are non-negotiable.

The UK startup ecosystem offers a wealth of opportunities, from government tax incentives to a strong network of accelerators and angel investors. But these resources don’t just fall into your lap. Founders need to be proactive, building relationships and positioning themselves well in advance to take advantage of these pathways.

Timing and preparation are everything. Successful founders start connecting with potential investors months before they need funding. They understand that trust and interest take time to develop, and they use this to their advantage by staying on investors' radars and presenting themselves as reliable and forward-thinking.

At the same time, the rise of digital tools and funding platforms has opened up access to capital, but it’s also made the competition fiercer. Your pitch must stand out, your data needs to be solid, and your business fundamentals have to be airtight. Investors have more choices than ever, so they can afford to be picky.

Being flexible in your funding approach is equally important. For example, you might start with angel investors for your first £100,000 but later find that government grants or revenue-based financing work better for your next round. The market shifts constantly, and founders who can pivot their funding strategies are better positioned to succeed.

The impression you leave during this process matters deeply. Transparency, professionalism, and dedication to your vision will resonate far more with investors than flashy presentations or networking hacks. Building a strong reputation now will pay dividends as your startup grows.

The UK’s startup environment is evolving, and with it comes fresh opportunities for founders willing to put in the effort. By combining traditional methods with modern tools, staying active in your local startup community, and remaining adaptable, you’ll be well-equipped to secure the pre-seed funding that can turn your business idea into a thriving reality.

FAQs

What do investors look for when assessing pre-seed startups in 2025?

When assessing pre-seed startups in 2025, investors zero in on a few critical aspects. These include the founding team's experience and expertise, the distinctiveness of the product or service, and any early indications of market interest or revenue potential. It's essential to demonstrate a solid grasp of your target audience and how your solution effectively tackles a genuine problem.

Investors also evaluate the size of the market opportunity, the scalability of the business, and its ability to produce outsized returns for the risk of investing at this stage.

How can startups use SEIS tax incentives to attract investors?

Startups have a golden opportunity to draw in investors by leveraging the SEIS tax incentives. These benefits are hard to ignore: investors can claim up to 50% income tax relief on investments up to £200,000, plus relief on capital gains tax. It’s a win-win, making early-stage investments not only attractive but also financially rewarding.

What are the benefits of using digital funding platforms for securing pre-seed investment?

Digital funding platforms offer early-stage startups several advantages that traditional funding methods often can't match. For one, they open up access to a broader network of investors, from angel investors to venture capitalists, which can significantly speed up the process of securing funds. These platforms are designed with startups in mind, offering simplified processes and tools that remove many of the usual barriers.

A standout benefit is the chance to raise capital without having to immediately surrender large chunks of equity or take on heavy debt. This approach helps reduce financial risk for founders. On top of that, many digital funding platforms provide useful insights and analytics, enabling founders to fine-tune their pitches and make a stronger impression on potential investors.

In a fast-paced and competitive startup world, using these platforms can be a smart way to secure pre-seed funding while keeping more control over your business’s direction.