Afore is Tripling Down on Pre-Seed
With a new $150 million Fund III in hand, we’re launching a superior way for founders to raise their first funding.
Afore was founded just over 5 years ago to build something missing in the VC landscape: a venture firm that won’t tell founders that it’s too early — or too risky– to invest.
We started the firm after years spent as institutional investors. We came to VC having served as early product leaders at Twitter and Google’s Android, giving us a unique understanding of how to shape a promising idea into a world-changing product.
As investors with strong product backgrounds, we made a conscious choice to focus on pre-seed. We’re passionate about supporting founders in that formative “zero to one” phase when there’s little or no product, no traction, and no revenue. Pre-everything. Pre-obvious.
In 2016, pre-seed was an outlier, with a small number of investors writing mostly small checks. Today, there are many more investors–from massive investment firms to the tiniest micro-fund– chasing alpha in pre-seed, where the risk and rewards are greatest. And today’s pre-seed round looks nothing like it did then.
Still, while many firms now dabble in pre-seed, few make it their focus or invest in pre-seed systematically. To many, pre-seed is a convenient way to get an early look at promising companies; it’s a means to an end. At Afore, it’s all we do. That focus has helped us become the investor of record for entrepreneurs raising their first institutional funding.
We have built an enviable portfolio of more than 80 companies, with a collective market cap that already exceeds $11.5 billion. Afore is proud to have been first –and quite often the lead– investor in breakout companies like Modern Health, BetterUp, Petal, Overtime, BenchSci, Hightouch, Flatfile, Neo Financial and Retain, among others, and to have led more than 80% of the rounds where we’ve invested.
To date, Afore-backed companies have raised more than $1.8 billion in follow-on capital. Nearly 85% of Afore’s portfolio companies have gone on to raise an institutional follow-on round; 64% of them have skipped straight to a Series A. And we’re just getting started.
Now, Afore is opening our next chapter. We have raised a heavily-oversubscribed third institutional fund, totaling $150 million. More than 85% of this new capital is from existing LPs that have been with us since day one, and we’re lucky that many of our incredible founders are also now joining as investors.
As with our first two, this fund will be dedicated entirely to pre-seed stage investments; we’re tripling down on pre-seed. With the addition of this new fund, we have now raised more than $300 million dedicated entirely to pre-seed investing.
Incredibly, our new fund represents more than a third of all pre-seed dollars raised in 2021. And as this analysis shows, nearly one-quarter of the more than $1.18 *billion* that pre-seed firms have raised since 2016 has gone just to Afore.
This new capital will allow us to invest even more resources in our team, so our eight-member team can move even faster to give founders the funding and the support they need.
Despite the market embrace of pre-seed, too many founders still hear “you’re too early.” Data shows more than 90% of today’s venture dollars flow to later-stage companies that have already reached product-market fit. Accelerators and other early investors aren’t set up to provide dedicated help and are unwilling to commit meaningful money. So instead of getting the capital they need, founders are too often offered minuscule investments at comically low valuations.
The harsh reality is that in today’s market, and at today’s prices, accelerator-level capital barely covers the cost of getting started. With just a few months of runway, founders end up on an endless fundraising and demo-day treadmill, leaving little time to build a viable product — let alone bring it to market. The bottom line is that you can’t fly a rocketship with a few gallons of gas; founders need fuel, not fumes.
Today, we’re launching Afore Alpha, a new product that offers founders something better. It distills everything we’ve learned since 2016 into a single, standardized product designed to increase founders’ odds of success.
Afore Alpha sets a new standard for what a pre-seed deal should look like in 2022 — one that gives “pre-everything” founders the runway and personalized resources they need to reach traction and raise a substantial Series A:
- Afore Alpha offers founders a $1 million lead investment via a $10 million post-money SAFE. That’s five times more capital, at five times the valuation, than founders can get from even the best accelerators — and unlike those options, Afore’s funding comes without MFN terms.
- With Afore Alpha, you’re in a cohort of one. Every single investment is paired with stage-specific guidance and dedicated 1-on-1 support with a laser focus on helping founders reach meaningful traction within a reasonable timeframe. It’s a world apart from short-term programs offering generic support and one-size-fits-all advice.
- We know what it takes to go from gestating a raw idea to a billion-dollar outcome because we’ve done it. We leverage that track record to get founders everything they need, from help with product strategy, recruiting, go-to-market strategy, and business development to customer introductions, investor introductions, and PR. We partner with product inventors on the trajectory-changing product invention and market discovery work that needs to happen to set the company on its path.
- Afore Alpha is available to any founder worldwide. Entrepreneurs from Latin America, Africa, the Middle East, and elsewhere are increasingly seeking the same type –and same level– of resources available to their North American peers. And rightly so. With Afore Alpha, founders will get the same generous terms, whether they’re in Singapore, South Africa, Spain, or San Francisco.
With Afore Alpha, founders can now raise one meaningful upfront round and spend their next year actually bringing their products to market and actually reaching traction. It’s a winning formula that has worked time and time again for our portfolio companies. Now, we’re making that same playbook available to founders everywhere through Afore Alpha. If this sounds interesting, we’d love to hear from you — apply here and we’ll get back to you within a week.
We are thankful to the investors who have believed in Afore and joined in our journey, and honored to have met and worked with so many talented and inspiring founders over the past few years. The best is yet to come.
