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How to source a $2M pre-seed raise? I will not promote
I will not promote! – Hi all, I've been having a few angel meetings lately and am getting very mixed feedback on how I should structure the raising of my $2M pre-seed round. Firstly, this is in tech (we are building a platform) and we will be the first to pioneer this vertical in a larger booming market, so it will be capital intensive. No one has complained about the amount that we are seeking to raise and it would be impossible to bootstrap, as the MVP alone is costing 6 figures to develop. In fact, I initially wanted to raise $500k, and multiple investors told me that they wouldn't invest because we were raising too little, so I am relatively confident in our round size. My ideal was to raise \~$500k of the $2M with angels, then finish the round off with a VC check or two from a few of the firms that we've been in touch with. But recently in angel meetings, some investors have suggested trying to raise the full $2M from angels, which kind of blew my mind. I hypothetically understand the advantages to doing so and forgoing VC altogether at the pre-seed level, but $2M sounds like an incredible amount to try to raise from tens or hundreds of different angels. They mentioned setting up an SVP to house all of the angels together on the cap table, but I honestly have never done that at any of my companies and am not sure whether it's necessarily prudent at this juncture. My other concern is that, unfortunately, the angels that I've been meeting with lately have been high value but smaller ticket (some as low as $5k, which was our round minimum – I might have to raise that!) so it would take an inordinate amount of angels at that ticket size to even come close to closing the round. I've had an investor tell me to take every amount of money that I can get – big or small – since we're pre-seed, and others tell me to raise our minimum investment to $25k and be more picky. We have strictly been using SAFEs. Any thoughts on any of this? I'm getting all kinds of a
The deal presents significant risk due to its high capital intensity and lack of specific product or market details. While the founder's status as a serial entrepreneur is a positive signal, the logistical challenges of a $2M angel-led round and the absence of a lead VC investor at this stage are major concerns.