The State of VC Funding in 2025: How We Raised a $720,000 Pre-Seed

Raising venture capital is never easy—but in 2025, the landscape is more competitive than ever. With the rise of AI startups and a new administration shaping financial policies, pre-seed funding has evolved into a game of timing, strategy, and clarity of purpose.

Here’s what I’ve learned from raising a pre-seed round in today’s environment—and what you need to know if you're thinking about raising VC funding in 2025.

AI Is Dominating VC Interest—But It’s Not the Whole Story

In 2024, over 33% of all venture capital funding globally went to AI startups. While that headline sounds exciting, it can obscure the reality for most early-stage founders: if you're not building a top AI company like OpenAI, the bar for funding is higher.

AI has become the new SaaS—every pitch deck now includes it, and every VC inbox is flooded. To stand out, you need a clearly differentiated product, a compelling market, and a credible path to monetization.

When Does Venture Capital Make Sense?

Venture capital isn’t a fit for every founder. Here’s when it might make sense:

• You’re entering a highly competitive market (e.g., sales tools, martech, or B2B SaaS) where capital is needed to accelerate distribution and gain market share.

• You’re in a capital-intensive sector, like biotech or deep tech, where product development costs millions.

• You’re open to acquisition or acqui-hire—because that’s the most common exit path for VC-backed startups. While not always glamorous, it can be a strong career move and unlock future opportunities.

But if you’re building a profitable, sustainable business and don't need to scale at breakneck speed? Bootstrapping may be a better option. Don't raise VC for the prestige—investor updates, constant meetings, and pressure to grow can drain your time and energy fast.

Fundraising in 2025: 7 Tips for Navigating This Climate

1. Expect it to take 3x longer than planned

We thought we’d close in October… it didn’t happen until February. Build extra runway and patience into your plan.

2. Read “Venture Deals”

This book is your go-to guide for understanding term sheets, equity, and investor lingo. It’s especially useful for pre-seed and seed rounds.

3. Treat fundraising like sales

Ask for a commitment in your second meeting. Don’t leave it open-ended—try:
“What would it take to get a commitment today?”
That clarity will save you months of waiting on silent investors.

4. Check recent investments on Crunchbase

Every VC says they do first checks. Many don’t. Do your homework—look for activity in your stage and sector.

5. Wait to do accelerators until you're post-product

We joined Techstars with just an MVP. In hindsight, we would’ve benefited more if we had a built-out product and clearer GTM motion to optimize the mentorship hours.

6. Avoid VCs with portfolio conflicts

If they’ve invested in a competitor, don’t bother. At best, they’ll waste your time; at worst, they’ll mine your insights.

7. Track everything with a CRM

Whether you're using Attio, Affinity, or Airtable—treat fundraising like pipeline management. Log touchpoints, follow-ups, and next steps for every investor. This keeps momentum strong.

Final Thoughts: Know Why You’re Raising

Whether you’re pre-seed or growth-stage, the best founders raise with intention. They understand the tradeoffs. Venture capital can open doors—but it also narrows your options.

If your goal is to solve a problem for your customers, there’s no “right” funding path. Just the one that aligns with your mission, values, and long-term vision.