Over the last 2 weeks, I spoke to 15 founders to understand what they want from their pre-seed investors. Conversations ranged from brief WhatsApp conversations to hour-long calls or email threads. But the common points were:

1. Capital

2. Connections

3. Metrics

4. Talent

Let's dive in:

Capital: $100k to $500k

A pre-seed startup in B2B software typically has a working prototype and beta customers. Founders need capital ranging from $100k to $500k under different scenarios and business models in order to develop the product further after beta customer feedback. This capital will take them toward a more refined MVP which can help make early revenues and move from an idea to a business. Founders are ok diluting up to 15% equity for this round which gives a baseline valuation anywhere between $1.5mn to $3.5mn depending on the stage and requirements of the business. Founders are not fussed about valuation but are laser-focused on dilution which is a welcome and positive sign.

Connections: Next-round investors and customers

Pre-seed founders appreciate any and all introductions. Considering the stage of the business, the model is a bit fluid and every interaction with domain experts and potential customers helps. Pre-seed founders have requested introductions to potential customers within the ICP both domestic & global. They also prefer if their pre-seed investor connects with possible seed and Pre A investors to understand how will they look at the opportunity in 12-24 months, and potentially start building a relationship via a mailing list to explore an investment conversation in due course.

Metrics: To reach before the next round

Pre-seed founders are hyper-focused on building their products and want to their investors to wear the hat of a consultant. They want investors to keep interacting with multiple next-round investors to understand which metrics the company should hit in order to become an investment-worthy opportunity in the next round. Connecting founders with peers who have a slightly mature business model also helps as founders can bounce ideas off each other.

Talent: Identify & fill

While pre-seed founders understand the kind of team required to do the job, they sometimes need help in identifying what to prioritize keeping in mind the limited resources available. They want to understand what other, successful founders have done in the past, in conjunction with what their business needs today. It can be as simple as prioritizing a UI person before a Finance person in the very early days, to formulating the JD of a seed stage BDR the company needs to hire today in order to meet targets 9-12 months out. Founders prefer if investors have a small cache of vetted talent available to be hired in a 30-45 day period.

This list is not exhaustive. But at the early stage rarely do other things matter in B2B software. Founders know their businesses and investors help them execute better by taking on tertiary responsibilities.

At Malpani Ventures we welcome this feedback positively and will try to do our bit to help our pre-seed founders succeed.

If the above resonates, and you are a pre-seed stage B2B SaaS founder with a working MVP and beta customers looking for up to $200k as first round of outside capital - please reach out to either Siddharth (ss@malpaniventures.com) or Dhruv (ds@malpaniventures.com).