How to Raise Pre-Seed Funding in 2022–2023

To succeed in raising funds for your startup, you need not only to connect with investors and convince them to get on board but you also need to be more convincing than others. Given the current deplorable and unpredictable economic situation, this process has become even more complicated, and fewer investors are rushing to pour their capital into half-baked businesses.

Just look at these numbers from Crunchbase. For VC funding, the percentage of favorable responses has dropped significantly:

14% down since April 2022

20% down since a year ago

40% down in late-stage venture capital since a year ago

Also, in the next 3–5 months, VC will put a freeze on startup funding. Does this mean you should wait for the economic dust to settle and put off your ideas? No! It’s the other way around! Recession is a time of opportunities and new ideas and the AngelBoard team’s mission is to help these ideas see the light of day.

What Is AngelBoard?

AngelBoard is an early-stage crypto funding platform that aims to combine the crowdsourcing nature of Kickstarter with the web3 technologies of OpenSea. It simplifies fundraising during the venture winter with NFT.

Any web2 or web3 project can get early-stage funding from their community with NFT drops.

Community members buy an NFT and get a small startup’s share. Startups, in their turn, raise a pre-seed round with just a few clicks.

Pre-Seed Round with AngelBoard

Most startups in the pre-seed phase have yet to take a product to market and may not even have an MVP. This makes it extremely difficult to convince pre-seed investors to bet on an idea that has yet to be realized. Now, startup pitching has become especially hard as it seems that the time of VC funds and angels being eager to invest in an idea is irreversibly over.

AngelBoard helps startups get their first funds and create a working model to pitch for bigger investments. Once you have your community rolling, you can seamlessly secure pre-seed capital with the help of web3. Experience shows that initially, your community will consist of your friends, colleagues, and later believers. However, those who want to invest small amounts, dubbed “micro investors’’, will soon join the ranks of your NFT buyers.

Though ECR (Early-Stage Crypto Funding) is only just emerging on the market, it has a transparent and structured framework. Here are the stages of raising a pre-seed round with the help of web3 technologies:

1. You sign up to AngelBoard using your Metamask account
2. Create your startup’s space
3. Set a number of NFTs and release them
4. Set the NFT price on OpenSea
5. Sell (or give away) NFTs to your community
6. Optionally, add links to your whitepaper, roadmap, and website

On AngelBoard, all operations are fixed in smart contracts to guarantee safety for all parties. AngelBoard provides support at every stage, helping with all operations from registration to the release of NFTs. Without the need for expensive upfront overhead, you can direct all funds into getting your startup into action.

When to Launch on AngelBoard?

Like any traditional investor, your community will write checks only when the idea they are presented with is compelling and the process of its realization looks transparent and viable. Unlike VC and accelerators, they are not looking to fund already functioning projects with significant traction. Their aim is quite the opposite — to join a project in the developing stage and later become part of something big, making profits off their initial investments.

Therefore, founders should do NFT drops as soon as they have shaped their idea, figured out the market opportunity and who the customer is, and when they are ready with the short-term roadmap. How short-term is the roadmap? This depends, but usually, a year-long structured plan is enough. The beauty of NFT fundraising is that you don’t need to impress investors or have a developed product and a hefty customer base. The whitepaper and roadmap will do all the pitching for you, but even that is optional.

How much pre-seed funding can you get with AngelBoard?

Pre-seed funding tends to seek significantly smaller amounts than investments in seed and Series A funding stages. On average, startups that secure pre-seed capital typically raise around $200k-500k.

With AngelBoard, the round’s size depends on your community’s scale. Usually, followers don’t tend to write big checks for an NFT drop, that’s why there’s a simple principle at work here: the bigger your community, the more checks you get. While it might be tempting to aim for pricier shares, remember that the higher the price for an NFT, the higher the expectations. So, it’s best to stay objective. Usually, the standard price for an NFT varies from $1k to $5k.

Benefits of NFT Fundraising over Traditional One

With decentralization being all the rage, now is the right time to jump on the bandwagon, become part of this ecosystem, and reap benefits from the mainstream. Digital crowdfunding

competes with orthodox investment searching in multiple ways. And the more ECR develops, the more obvious the advantages are.

Straightforward Pre-Seed Round

The main benefit is that ECR helps you close the pre-seed round of investments in the shortest time possible and without tons of documentation, brain-racking research, and months of pitching. As we said earlier, it’s enough to shape your idea into the whitepaper and schedule the implementation steps, but even a simple company description might be enough for pre-seed fundraising.

Small Checks Secure Development

As your community is the source of your investments, the stronger and bigger it is, the quicker your startup closes the early-stage round. Don’t know how to evolve your community? No worries, AngelBoard will give you some practical tools for user engagement.

Creative Ownership

Not only does a community grow together with your business, bringing more investments, it might also help you make important decisions. You can always ask your community for advice or conduct polls to understand their opinion. Every time you launch a new product or add a new feature, your community is the place where you can quickly get feedback and save lots of time and money on custdevs.

It’s worth pointing out that the ECR model is rapidly evolving and new features and opportunities may constantly be emerging, so check for updates in our blog and join us to raise your first round of investments.