Carta has released its latest report, titled, State of Pre-Seed: Q1 2024.
Carta notes in the research report that fundraising for pre-seed companies “stayed robust in Q1 2024, dominated by SAFEs and convertible notes; valuation caps remained flat.”
While commenting on the actual definition/criteria for a typical pre-seed round, Carta said that many startups will “begin their fundraising journeys in this stage, but there are no consensus definitions in this part of the venture market.”
However, Carta says that there is one clear trend: Companies at this stage “are fundraising using SAFEs (Simple Agreement for Future Equity) and convertible notes as opposed to the standard priced venture rounds.”
Given this trend, Carta think their data set “can help founders make sense of the ambiguity.”
Since 2020, companies on the Carta cap table platform “have signed 101,865 individual SAFEs and convertible notes before raising any priced funding.”
That’s $14.5 billion invested into the earliest startups, the Carta update revealed.
Of course founders on Carta who “have yet to raise a million dollars have access to our cap table platform for free through Carta Launch, which also includes tools to create and fund SAFEs in a few clicks.”
Q1 highlights shared by Carta are as follows:
- SAFEs have eaten more of the early-stage market: SAFEs are now the preferred investment instrument for all rounds under $3 million.
- Valuation caps stayed flat in Q1: The SAFE round valuation caps have shifted less frequently than the full priced round valuations.
- Small checks made an impact: 41% of checks in SAFE rounds under $1 million were below $25,000.
For more details and the full report, check here.
As covered, Carta says that it is “trusted by more than 40,000 companies and over two million people in nearly 160 countries to manage cap tables, compensation, and valuations.”
Carta also supports nearly 7,000 funds and SPVs, and “represents nearly $130B in assets under administration.”
Today, Carta’s platform manages nearly three trillion dollars in equity globally.
Companies and funds like Flexport, Tribe, and Harlem Capital build their businesses on Carta.
