Seed and pre-seed funds

A generation ago, startups went from angels straight to a Series A led by a Sand Hill Road firm. Today there is a busy layer in between. Seed and pre-seed funds raise money from institutions like any venture firm, but they specialize in the very first professional round. Many of the best known companies on the Peninsula took their first institutional check from a seed fund.

This page explains what these funds do, how they differ from large multi-stage firms and how a founder can tell which kind of investor fits. It names a few well known firms we could confirm, in alphabetical order. It is not a ranking. For background on the whole system, see our venture capital guide.

What seed funds do

A seed fund backs companies at the stage where the product is early and the evidence is thin. It might be a working prototype with a few dozen users, a research result from a Stanford lab or a team with deep experience in a market. The money pays for the next 12 to 24 months of building, with the goal of reaching the milestones a Series A investor wants to see.

Seed funds usually:

• Write the first institutional check, often alongside angels.
• Lead or co-lead the round, which means setting terms and doing the most diligence.
• Help with early hiring, customer introductions and preparing for the next raise.
• Rarely take board seats at the seed stage, though some do.
• Keep a smaller pool of money for follow-on investments in their best companies.

Pre-seed versus seed

The labels are informal. Pre-seed usually means money raised before there is much proof, sometimes before a company is even incorporated. Seed usually follows once there is a product and early signs that people want it. Dollar amounts at each stage have grown over the years and vary a lot by sector. A hardware or biotech seed round tends to be larger than a software one because building the first version costs more.

Seed funds versus multi-stage firms

The biggest Sand Hill Road firms now invest at every stage, from seed to pre-IPO. Many run their own seed programs. That gives founders a real choice. The trade-offs are worth understanding.

Signaling risk is the one founders hear about most. If a large firm owns part of your company and then declines to lead the next round, outside investors may read that as a negative signal. Not everyone agrees on how much that matters. A simple step is to ask any multi-stage investor directly how their follow-on decisions are made and how often they lead the next round for their seed companies.

The math behind a seed fund

Seed funds follow the same basic economics as other venture funds, explained in our glossary. Limited partners commit money. The fund charges an annual management fee and the partners keep a share of profits, called carried interest. A common pattern is around 2 percent and 20 percent, though terms vary.

Because seed funds invest so early, most of their companies will fail or return little. A fund needs a few companies to grow very large to make up for the rest. That shapes behavior. Seed investors often care about ownership, because a small stake in a big winner may not return the fund. They also tend to back many companies, which spreads risk across a larger portfolio.

Well-known seed investors

These firms are widely known among Bay Area founders. We confirmed each one's current focus on its own website in 2026. Other strong options exist and the right firm depends on your sector and stage.

First Round

First Round lists offices in San Francisco, New York and Philadelphia and describes itself as the largest seed-stage venture fund in the country. It invests at pre-seed, seed and Series A and says it usually aims to be the first institutional money in. Its site lists typical first checks of $1 million to $5 million, averaging about $3 million. It generally passes on companies raising a third or fourth round. The firm also runs a Pitch Assist program, launched in 2014, to help its companies raise later rounds.

Floodgate

Floodgate lists its office at 506 Santa Cruz Avenue in downtown Menlo Park, a short drive from Palo Alto. It describes itself as a venture firm that backs founders at pre-seed and seed and focuses on early stage technology companies.

Pear VC

Pear VC was founded in 2013 and is based in Menlo Park. It focuses on pre-seed and seed and runs PearX, a 12 week program for early founders. Our accelerators guide compares PearX with other programs.

SV Angel

SV Angel is the firm built around longtime investor Ron Conway. It describes itself as a small team that invests long term in founders at seed and growth stages and helps with business development, acquisitions, key hires and communications.

Accelerators

Y Combinator is not a seed fund in the classic sense, but its standard deal puts money into hundreds of companies a year at the earliest stage. It created the SAFE, now the most common seed contract. For Stanford founders, StartX takes no equity and charges no fees. See our Stanford entrepreneurship programs page for more.

How to choose a seed investor

1. Check stage fit. Look at the companies the firm backed in the past two years. If they are all Series A, a pre-seed pitch is unlikely to land.
2. Check sector fit. Partners who know your market can make better introductions and ask sharper questions.
3. Ask about reserves. Will the fund invest again in your next round? How much and on what basis?
4. Talk to their founders. Ask especially about companies that struggled. How the investor behaves in a hard year tells you more than a success story.
5. Read the terms. A SAFE with a cap, a priced round or a convertible note each work differently. Our term sheet basics explain them.

Meeting seed investors locally

Seed investors are spread between San Francisco, Menlo Park and Palo Alto. Many first meetings happen on video, with in-person meetings once interest grows. Downtown Menlo Park, where Floodgate is based, is a few minutes north of Palo Alto along El Camino Real. Our guide to pitching investors covers meeting etiquette and follow-up. If you are visiting for a round of meetings, a rental car makes it easier to move between Sand Hill Road, downtown and San Francisco on the same day.

Frequently asked questions