Pre-seed investor expectations are changing (I will not promote)

I had a reality check conversations with some founders about the realities of pre-seed funding yesterday and I have this conversation weekly. Founders that hear about “pre-seed,” especially before 2021, believe that you can get funded based on your idea and MVP. It’s becoming more rare as development becomes easier. Yes, in pre-seed, there will always be that friendly angel that believes in you somewhere and writes that early check. But if you’re banking on raising money before getting a customer, it’s been a rude awakening. More pre-seed investors are saying, “Go and get at least one customer and tell me what you’re learning.” They don’t want to see another MVP or demo alone (GPT wrappers anyone?) I saw a stat that last year, just under half of pre-seed funds needed to see revenue. Some wanted up to a million dollars. Is it fair? I know a lot of founders complain. It’s just the market right now. You’re also competing with so many other places the investor could put their money. A founder told me that they are in a chicken and egg scenario. They needed money to get customers or but investors won’t invest until they get customers. Founders say “Ed, it’s like they want us to produce an egg without a chicken or vice versa.” The answer is, “yes.” And that’s the reality. Founders need to sell from day one. If you need funding to build, sell the idea at least. If your problem is painful enough, your solution novel enough, and your team credible enough, you can still sell something. What you sell is where you become the founder investors want to see. Or, build something that costs less if you don’t have the funds to start. I’m sure many here have done it and can tell you stories if you ask the right questions. Even better, build a business that cash flows first and needs investors second. It’s possible. I’m sure many here have done this too.