Afore’s $185 Million Fund IV: Introducing Pre-Seed 2.0
Ten years in, it’s time to redefine and expand the aperture of pre-seed
When we started Afore in 2016, pre-seed was a niche, largely unknown category. But we put a stake in the ground by raising by far the largest pre-seed fund at the time, and helped put pre-seed on the map. Today, we are announcing a new $185 million Fund IV, again the world’s largest fund of its kind, to take pre-seed to the next level.
We raised this new fund in the midst of a boom in pre-seed. In 2016, 14% of seed rounds were classified as “pre-seed”; by 2023, pre-seed rounds represented nearly 60% of all seed deals, according to data from Crunchbase.
That momentum is not surprising. Pre-seed is the optimal moment in a company’s lifecycle to invest, and Afore’s performance proves it. Our 200-company portfolio has a collective market cap that now exceeds $13.5 billion, and pre-seed investments in now-flourishing companies like Modern Health, BenchSci, Hightouch, Neo Financial, Overtime, Gamma, Seel, New Lantern and ConverzAI have enabled us to do something rare: deliver cash back to our LPs. We returned more than 1x of Afore’s $47M debut fund in the last 6 months alone, despite an industry-wide slump in VC returns.
But pre-seed’s rising popularity has come with a new set of problems. While virtually every investor claims to back pre-seed founders, their definitions of what “pre-seed” actually means are all over the map. Data-tracking firms like PitchBook, Carta and Crunchbase also have differing views on what qualifies as pre-seed.
In the “pre-everything” stage, there’s wild variation in how far along founders are in the process of coming up with an idea, finding co-founders, building out a product and getting feedback from early users. It’s a delicate time characterized by rapid experimentation and iteration. The original idea rarely survives this process, and teams frequently pivot. That level of variability is unique to pre-seed, and it requires investors comfortable with a high degree of uncertainty.
If you’re a founder at the earliest stage, it can be confusing to know what true pre-seed should look like, who you should approach to get it, and especially when you should think about raising it.
It’s time for a reset.
Introducing Pre-Seed 2.0: the future of pre-seed
Until now, most pre-seed investors have focused on serving founders who have made it to (or beyond) the idea stage, especially those who are already starting to emit early signals of product-market fit. But that approach leaves behind the large community of founders who are even earlier in the journey — people in the process of coming up with an idea, or deciding which of several ideas is most worth pursuing.
The end result is that the very earliest founders –who would benefit most from access to early capital, dedicated attention and space to grow– are the least likely to ask for or receive it.
We took an initial step towards addressing this need in 2023, when we launched Afore’s Founders-in-Residence (FIR). FIR is a structured, 8-week program designed to support ambitious founders in the exploration stage who have either no idea, or no fixed idea. We work with teams to refine their ideas in a community of like-minded peers and prospective customers. More than 50 companies have gone through the FIR program’s first six cohorts, and applications are now open for the seventh cohort, which starts in May.
Today, we’re introducing a product that expands the aperture of what pre-seed is and who it serves. We call it Pre-Seed 2.0, and simply put, it’s the best and most useful form of pre-seed available to founders, whether they’re early in the pre-idea phase or post-idea and working toward product-market fit.
Pre-Seed 2.0 is a distillation of everything we’ve learned from meeting with more than 20,000 startups, investing in more than 200 of those companies, and deploying hundreds of millions of dollars in pre-seed over nearly a decade. It’s designed to deliver the best outcomes for the best founders through a discrete, compelling product that extends the benefits of pre-seed funding and dedicated support into the earliest stages of creating a company.
- Meeting you where you are: Pre-seed can be immensely helpful to anybody in the earliest stages of founding a company. But many founders don’t seek it out, thinking they’re not ready.
The reality is it’s never too early — whether you’re pre-idea, post-idea; pre-founder, post-founder; pre-design partner, have quit your job or are still in school, we can partner with you to move faster. Pre-Seed 2.0 covers the full spectrum of pre-seed.
- Custom-tailored for you: Each investment we make is tailored to your specific situation and your specific needs, whether that translates to a $50K check or $2M check. We don’t force you into a preset mold; one size does not fit all.
- Freedom to build, on your timeline: We’ll work with you for however long it takes to reach conviction on your idea and find product-market fit; it’s the polar opposite of accelerators’ “hatch-and-dispatch” model. We don’t force you to raise again in three months at demo day, and there’s no time limit on our support.
- No ulterior motives: We’re investing because we want to help you now, not buying a call option to invest later, after you’ve done the hard work on your own.
- Unbelievably helpful: We make a limited number of investments each year; each one is a priority, and we dedicate the full resources of our team to anything you may need — whether that’s help with finding a co-founder, recruiting early hires, getting go-to-market support, or anything else.
- A place to grow: Afore’s offices now include an entire floor where founders can work for free as they build out their product, team, and vision.
More to Come
We want Afore to be the investor of choice for any ‘pre-everything’ founder, and Pre-Seed 2.0 is just the tip of the iceberg. This summer, we’re launching an ambitious new initiative to support the next generation of founders right where innovation often begins — on college campuses. Stay tuned for more announcements in the coming weeks. :)
