ClubHouse Summary: European pre-seed roundtable
As promised at the end of the ClubHouse session I am sharing the notes of the discussion, in case you missed some points or you could not make it all!
Also, I have recently published a short “guide to pre-seed in Europe” if you want to check it out:
On the growth and persistence of pre-seed rounds in EU….
…in the last ~24 months, there has been a very strong influx of capital in the earliest stages and pretty much every investor is trying to get into exciting companies as early as possible. The expectation is for this trend to be persistent as all the speakers signalled the intention to keep on deploying at the same (if not increasing) rate at pre-seed.
In some major hubs like London, Paris and Berlin rockstars teams can directly raise pre-seed rounds that have size and valuations typical of fully-fledged seed rounds (2m-3m)
On what are the minimum requirements to raise a pre-seed and how funds do due diligence…
…the minimum requirements are very low and pretty much everything boils down to the team: is the team equipped to make their vision a reality?
This is also reflected by the fact that due diligence at this stage tends to be centered more around team reference checks.
On mistakes to avoid at pre-seed…
…typical mistakes to avoid are:
(1) be undercapitalized as the company needs to have enough capital and time to reach the next inflection point in order to raise the next round
(2) choose the wrong partner. Pre-seed is a tough roller-coaster and it helps a lot to have someone on board who is used to the level of risk and unknowns typical at pre-seed stage.
(3) Not getting enough help/ practical support from your investors. Sometimes pre-seed companies are so early that the lines to co-creations are blurred, and so it is super important to have partners (VC and angels) that are able to support the company with customer introductions and real support on company building topics
On what companies need to validate before raising their seed…
…from a general perspective, the main requirement is to have brought the company to the next level, which can mean several things but mostly it boils down to have:
(1) hired a team
(2) built an MVP/Beta
(3) gained customers/users/POCs on the product
On what more pre-seed means for angels and accelerations programmes…
…at the moment it is possible to build great syndicates right out of the gates for companies going through accelerations and also for angels is easier to build early on a strong syndicate
That´s it, folks!
If you are thinking about raising a pre-seed round and look for VC partner that has done it before at pre-seed feel free to ping me at federico@pauaventures.com
If you have feedback feel free to leave a comment here or leave a clap if this was useful for you!
