How to Raise a Pre-Seed and Seed Round in 2026 - Part II

This is Part II of the guide. Part I covered everything that has to be true before your first email: the fundamentals of pre-seed and seed rounds, the founding team, the story that has to travel without you, and the investor pool. If you haven’t read it yet, start there.

One idea runs through both parts, and it is worth repeating before we go on. I call it the Fit Stack, and it has three layers. Your round has to fit the milestone it is paying for. The investors you pitch have to be able to write that round at that price. And the partner who champions you has to be able to carry your story into a meeting you will never attend. Part I built all three layers. Part II puts them to work.

What Part II covers

You have a round that fits your milestone, a story that travels and a list of investors who can say yes. Now you run the process. This is the part founders picture when they think about fundraising, and it goes much better when everything before it is done.

Get your house in order before the first email. Put everything an investor might ask for into one folder: the deck, a clean cap table with every SAFE and note modeled, your incorporation documents, signed IP assignments from every founder and contractor, and a one-page summary of your numbers. If ghost equity or any other awkward fact is sitting on your cap table, deal with it now, as we discussed in Part I (2.1). You do not want to discover a problem in your own paperwork while an investor is waiting.

Write your materials at every length. From Part I (3.1): one sentence, one paragraph for the email, the deck, and the follow-up memo for after a good first meeting. Write them all before you start, so you are never drafting under pressure.

Start with the investors you want least. Your pitch at meeting six will be noticeably better than your pitch at meeting one. Spend that improvement on the firms you care about most by opening with a few firms further down your list. Treat those early meetings as rehearsal with real stakes, and write down every question you get asked.

Then reach out, and let the best channel lead. In our April to June data, warm introductions lifted the first reply and the first meeting. An introduction is borrowed credibility, so its value depends on whose credibility you are borrowing. A founder the investor has already backed is vouching with their own reputation, and that is the introduction a partner reads first. Ask each person who introduces you to forward a short email you have written, so the introduction carries your story in your own words.

Cold outreach works when the fit is specific. If you have no path to an introduction, write to the partner directly. Name the portfolio company you resemble, the reason your round fits their fund and the one fact that makes you worth thirty minutes. An email that shows you did your homework gets read. A mass email that could have gone to anyone gets ignored, and investors can spot one in a sentence.

Follow up once. If an introduction or a cold email goes quiet, one polite follow-up a week or so later is normal. Beyond that, silence is an answer, and pressing harder only damages the relationship you may want in a year.

Let me set your expectations. Rejection is the default. Most of your conversations will end in a no, and many of those nos will come from investors who liked you. One lead is all you need, and finding that one takes many conversations.

Run the raise in waves. Rather than trickling out emails one at a time, contact ten to fifteen investors in a fixed window, then the next ten to fifteen. Replies land close together, first meetings happen in the same weeks, and you end up with several conversations moving in parallel. A slow trickle tells every firm it is the only one talking to you.

Keep the conversations in step. Leverage comes from decisions that land in the same week. If one firm reaches a term sheet while the rest are still at first meetings, you will have to decide before you can compare. Slow down the fast conversations a little and speed up the slow ones.

Hold first meetings on video, and meet your lead in person. Video lets you take more first meetings in a shorter window and keeps the waves on schedule. Before you accept a lead, sit across a table from that partner at least once. Some things about a person only show up in the room.

Make each meeting a conversation. Use the deck as an agenda and stop often. Ask the partner what they have seen in your space and what worries them about it. An investor who talks for a third of the meeting is thinking about your company.

Know how pre-seed and seed differ. A pre-seed raise is usually assembled check by check, with a rolling close as each SAFE gets signed. A seed raise is a search for one lead, and the rest of the round forms around whoever sets the terms. Put most of your seed effort into finding that firm.

Keep it short. How long you have been in market is a fact investors read without asking. A focused raise run in waves protects that signal, and a seed raise run well usually takes a few months from first email to money in the bank. A raise that drags on becomes a question you have to answer in every meeting.

Count only what is in writing. Enthusiasm in a meeting, a request for more data, even a partner meeting on the calendar: none of these are commitments. Don’t tell other investors a term sheet is coming until it is in your inbox. When one does arrive, tell the other investors in your process promptly and honestly, and ask where they are in theirs.

Here is a shift I want you to make in how you think about fundraising. Most founders treat it as persuasion: a better deck, a better pitch, more emails. The founders who raise efficiently treat it as an information problem. They know who can say yes, when and why before they ever ask. I call that fundraising intelligence, and it comes in three layers.

Intelligence about investors. Which funds are actively writing first checks right now, and which are mostly supporting their existing portfolio? When did each fund close, how large is it, what does it typically write, and what did it invest in over the last year? Which partner leads deals like yours, and what have they written or said publicly about your market? Every one of those answers changes who goes on your list and in what order.

Intelligence during the raise. Watch what happens to your materials. Deck-sharing tools show you who opened your deck, how long they spent and which slides they lingered on. An investor who read every slide twice is worth a follow-up. One who closed it after slide two told you something about your opening. And ask good questions in every meeting. When did the current fund close? Is the firm still making new investments? How does it decide which companies get follow-on money? A fund that is protecting its reserves will tell you more in those answers than in the rest of the meeting.

Intelligence about yourself. Remember from Part I (3.2) that investors now run your deck and your calls through AI to find the gaps. Do it first. Find out how your deck reads to someone who has never met you: what stage it signals, what risk it suggests, which investors it fits. In our Q1 2026 data, nearly half of first deck uploads matched no investors at all, because the deck was signaling something different from what the founder believed it said. That is a much cheaper discovery in week one than in week nine.

This is the category CherryPitch was built for. The founders who raise fastest tend to be the best-informed people in the room.

You will get asked the same questions again and again, so prepare for them the way you would prepare for an exam you know the topics of. Keep the notes from your early meetings, group the questions, and write your best answer to each.

They tend to fall into a few families. Market: how big is this, and how do you know? Why now: what changed? Team: why you, and what happens when you disagree? Competition: why won’t the incumbent just build this? The round: what does this money prove, and what will you raise next? The hard one: every company has a question it would rather not hear. You know which one is yours. Write that answer most carefully of all.

Answer with incentives. Take the incumbent question. A weak answer argues that the incumbent can’t build what you built. A strong answer explains why it won’t: the change would eat into revenue it depends on, unsettle the customers it already has, or require a rebuild it has no reason to start. Then it names what you have learned that the incumbent hasn’t. Partners are listening for whether you understand the incumbent’s incentives better than the incumbent does.

Answer, then stop. Give a clear answer in fifteen or twenty seconds and let them ask the follow-up. Long answers bury the point, and the follow-up question tells you what they actually care about.

Say when you don’t know. If you are asked something you haven’t figured out yet, tell them what you believe today, what would prove you wrong, and when you expect to know. "We haven’t tested this yet, and here is how we will" builds far more trust than a confident number invented on the spot. And with AI reviewing the transcript afterward, an invented number has a short life.

Most rejections are polite, and most are vague. Investors want to keep the door open, they rarely gain anything by being blunt, and they sometimes don’t know the exact reason themselves. Your job is to learn to read them.

Three habits help.

Ask one question. When you get a no, reply graciously and ask a single question: what would you need to see to look at this again? Some investors will answer, and their answer is better feedback than anything you will get from friends.

Log every reason. Keep a column in your tracker for the stated reason. One investor saying "too early" is an opinion. Five saying it is data about your round: its size, its price, its timing or the story you are telling. Remember the founder with ghost equity from Part I (2.1): each no he got was polite, and the reason underneath was the same every time. Patterns tell you what to fix.

Keep the door open. Thank them, don’t argue, and add them to your investor update list. A polite no today is often a warm conversation at your next round, when the evidence they wanted is finally there.

Once an investor wants to move forward, they will verify what you told them. Seed diligence is lighter than later rounds, and it moves much faster when your folder from 5.1 is ready before anyone asks. Expect requests for:

Expect them to compare everything against what you said in meetings and what your deck claims. If you followed the advice in Part I (3.2), that comparison holds no surprises.

Now do your diligence on them. They are checking your references, so check theirs, and pick the founders yourself rather than taking the list the investor hands you. Include at least one founder from a company that struggled or failed, because that is where a partner’s character shows. Ask questions like these:

You are choosing someone who will sit on your cap table, and often your board, for the life of the company. Spend at least as much effort checking them as they spend checking you.

A term sheet is the summary of the deal an investor is offering you. It usually runs a few pages, and most of it is not legally binding. The parts that usually are binding include confidentiality and a no-shop clause, which stops you from talking to other investors for a set number of weeks while the lawyers turn the term sheet into final documents. Read that no-shop period carefully, because the day you sign, your leverage ends.

Two pieces of advice before we go through the terms. First, have a startup lawyer review every document before you sign. Use someone who does venture deals every week, because a generalist will cost you more in the end. Second, understand the terms well enough to know which ones deserve a fight. That is what this section is for. You will negotiate better and more cheaply when your lawyer is confirming your judgment instead of forming it from scratch.

One more thing about timing. Many term sheets come with an expiration date, often about a week. Treat it as a request and answer it like one. If you need time, say so, explain why, and propose a date. Silence is the one response that reliably ends the offer.

Founders look at valuation first, so we will too. But I want you to understand what the number actually means before you celebrate it.

Pre-money and post-money. The pre-money valuation is what the company is worth before the new money comes in. Post-money is pre-money plus the new money. The investor’s ownership is their check divided by the post-money. A $4 million investment at a $20 million post-money buys 20%. Whenever someone quotes you a valuation, ask which one they mean. It is an easy mistake to celebrate a pre-money number that turns out to be post-money.

Where the number comes from. At pre-seed and seed there is no spreadsheet that produces your valuation. It comes from three things: what comparable companies are raising at right now, how much competition there is for your round, and the fund math from Part I (4.4). A fund that needs to own 15% to 20% and writes a $3 million check cannot go much above a $15 million to $20 million post-money, no matter how much it likes you. When you understand that, you can negotiate on the investor’s real constraint instead of on adjectives.

SAFE caps are valuations too. If you raise on SAFEs, the cap is your valuation in everything but name, and you will feel it when the SAFEs convert. Caps have been climbing: on Carta, the median cap on SAFEs above $2.5 million reached $35 million in Q2 2026, up 40% in a year. Investors usually set a cap at a modest premium to what they think the company is worth today, expecting the company to be worth more by its priced round. If it isn’t, the cap becomes a ceiling you have to grow through.

The option pool shuffle. This is where headline valuations quietly shrink, so let’s do the arithmetic carefully. A lead offers $4 million at a $20 million post-money valuation, which sounds like a $16 million pre-money. Then the term sheet asks for a 10% option pool, created before the investment. That pool is 10% of the post-money, or $2 million, and because it is created first, it comes entirely out of the existing shareholders. Your effective pre-money is now $14 million.

You can’t avoid an option pool, and you shouldn’t want to, because you need equity to hire. What you can do is size it to an actual hiring plan. Build a list of the hires you will make in the next eighteen to twenty-four months, put a realistic grant next to each, and add them up. If that total is 7%, argue for 7%, with the list in hand.

The price you can grow into. Go back to the sanity check in Part I (1.4). Every dollar of valuation you take today becomes a bar your next round has to clear. A higher price means less dilution now and more pressure later. The right valuation is the one where your next round looks likely if the plan goes reasonably well, rather than only if everything goes right.

The highest offer is one input. Ownership matters, and you should care about dilution. But you are choosing a partner for ten years, and a few points of dilution are a small price for the right partner. An investor who pays the highest price and then disappears, or worse, fights you at the next round, will cost you far more than the difference.

Most terms in a seed term sheet are standard, and you should accept them without spending goodwill. A few deserve a careful read, and a few deserve a firm push back. Here is how I sort them.

Let me walk you through the ones that matter most.

Liquidation preference. This decides who gets paid first when the company is sold. Use our example: an investor puts in $4 million for 20%, and the company later sells for $10 million. With a standard 1x non-participating preference, the investor takes the greater of their money back or their 20% share. Here that means $4 million, and the remaining $6 million goes to everyone else. With a participating preference, the investor takes $4 million and then 20% of the remaining $6 million as well, $5.2 million in total. In a $200 million sale the difference is small. In a modest sale, which is how many companies end, it comes straight out of the founders and the team. That is why participating preferences and multiples above 1x are a push back.

Anti-dilution. This protects the investor if you later raise at a lower price. Say your seed investors paid $1.00 a share and your next round prices at $0.50. Full ratchet resets their price all the way to $0.50, effectively doubling their shares at your expense. Broad-based weighted average adjusts their price only partly, based on how much money was raised at the lower price. Weighted average is the norm at seed. Full ratchet belongs in a much tougher negotiation than this one.

The board. At seed, the common shape is two founders and the lead investor. Treat every board seat as permanent, because seats rarely come off and later rounds tend to add more. Spend your negotiating attention on who gets the seat and how the balance of votes changes over time. Read any clause about adding independent directors closely for exactly that reason. And if the company is still a few people building the first version, a formal board can wait.

Protective provisions. These list the decisions that need investor approval. A short list covering major events, such as selling the company, creating a new class of shares or taking on significant debt, is standard. Read every item. Anything that reaches into ordinary operating decisions, like budgets, hiring or product choices, should come out.

Founder vesting. Your investor may ask the founders to put their shares on a vesting schedule, even if you have been working for a year. Don’t take it personally. Remember the ghost equity story from Part I (2.1). Vesting is the clause that makes equity follow the work, and it would have saved that company. Negotiate credit for the time you have already worked, and make sure the terms for a departing founder are clear.

Every term you sign at seed shapes your next raise. Founders tend to negotiate this round as if it were the last one. Investors read it as the first chapter of a longer story, and you should too.

Pro rata. A pro rata right lets an investor put in enough money in your next round to keep their ownership percentage. It is standard, and it signals that your investors intend to keep backing you. Super pro rata, the right to buy more than their current share, is different. It eats into the allocation your next lead needs to hit its own ownership target, and on Carta, Series A rounds sold a median of 18% of the company over the six months to July 2026. If your seed investors claim a big piece of that, your Series A lead may have no room. Push back on super pro rata.

Constructing the round. Start with the lead. Its ownership target is the anchor, and everything else fits around it. Then add co-investors the same way you add angels in Part I (4.2): give every check a job. A round with one committed lead and a few carefully chosen co-investors is much easier to bring into the next round than a long list of passive names. Every extra name on the cap table is one more pro rata right competing for space in a round where your next lead needs room.

Think about who follows on. At your Series A, the first thing a new lead will ask is whether your existing investors are investing again. If a fund on your cap table has reserves for you and uses them, that is a strong signal. If a large multi-stage firm led your seed and declines to lead your A, that is a signal too, the one we discussed in Part I (4.4). Choose your seed investors knowing which signal each of them will send in two years.

Keep the cap table clean. Model your full cap table after this round, with every SAFE converted, the new option pool in place, and a plausible Series A on top. Know exactly what the founders own at each step. Carta’s medians put founding teams at 56% after seed and 36% after Series A. If your model puts you well below those numbers before you have raised a Series A, fix it now, while you still have the leverage to change the terms.

If you need a bridge. Sometimes the milestone takes longer than the money lasts. A bridge round from your existing investors can buy the time you need, and how they respond tells every future investor how much they believe in you. That is one more reason to choose investors who have reserves and use them. Ask about their bridge behavior in your reference calls from 5.6, before you need one.

We have covered a lot of ground. If you take nothing else from this guide, take these rules. Each one points back to a section where we worked through the reasoning. Sections 1 to 4 are in Part I.

Go back to the Fit Stack from the start of this guide. Your round has to fit the milestone it pays for. Your investors have to be able to write that round at that price. And your partner has to be able to carry your story into a room you will never enter. Get those three layers right and the process gets shorter, and far more likely to end with the right yes.

How much equity should I give up in a seed round?

Median seed dilution on Carta was 18% over the six months to July 2026, before any earlier SAFEs convert. The median founding team holds about 56% after seed and 36% after Series A. Model your own cap table with every instrument converted before you sign.

How long does it take to raise a seed round?

A seed raise run well usually takes a few months from first email to money in the bank, plus the preparation before it. Running the raise in waves and keeping conversations in step is the best way to keep it short.

What should I do when an investor says no?

Thank them, ask one question about what they would need to see, and log the reason they gave. One investor saying "too early" is an opinion. Five saying it is information about your round’s size, price, timing or story.

What is a standard liquidation preference at seed?

One times the investment, non-participating. The investor gets either their money back or their ownership share of a sale, whichever is larger. Push back on participating preferences or any multiple above 1x.

What is the option pool shuffle?

When an investor asks for a new option pool to be created before the investment, the pool comes entirely out of the existing shareholders. A $16 million headline pre-money with a 10% pool on a $20 million post-money is really $14 million. Size the pool to an actual hiring plan.

CherryPitch Fundraising Data, Q2 2026: 1,336 investor outreaches from 108 founders, April to June 2026. CherryPitch Deck Analysis, Q1 2026: 1,032 decks. Carta, VC Fundraising Benchmarks, July 2026. Carta, SAFE valuation caps, Q2 2026. Carta, State of Seed, Winter 2025.

CherryPitch reads your deck the way an investor reads it, then shows you which investors your raise fits.