Ask Us Anything about Pre-Seed and Seed Investing in Climate

Lessons from Enduring Planet & Friends’ December 2025 Community Event

At our latest Enduring Planet & Friends Community Event - Ask Us Anything about Pre-Seed and Seed Investing in Climate - we unpacked the the reality, challenges, and tactics of raising early-stage venture capital in today's market environment.

The event was not recorded to allow for very candid conversation, but we produced a series of summary insights below for folks who could not attend. Questions are listed in order of discussion, not in order of importance.

Speakers:

• Dimitry Gershenson, CEO at Enduring Planet
• Sundeep Ahuja, Founder and GP at Climate Capital
  

Question:  When pitching climate investors, what has more weight: financial or climate impact potential?

Answer:  For institutional VCs that focus on climate, "climate impact" is a bar you must cross, but after that, financial potential is what matters most. VCs need to return their fund on every deal. Some investors have specific climate requirements, but most won't trade financial return for climate impact unless they're explicitly philanthropic, impact-first investors.

Question:  How can VCs with limited hard tech/deep tech experience learn to invest in startups in those fields?

Answer:  At Pre-Seed and Seed stages, much of the decision is about the founder - their background, qualifications, and ability to execute. Even without deep technical knowledge, investors can evaluate the market size, competitive landscape, and potential moats. For technical diligence, they'll bring in colleagues or experts to help evaluate the technology. Having said that, founders should generally focus on approaching VCs who have experience with hardware or deep tech deals. Trying to convince non-deep tech investors to do deep tech deals is more-often-than-not a losing battle.

Question:  What's the distinction between CVCs (corporate venture capital) and VCs, and how can founders leverage multiple funding sources?

Answer:  In this market, approach everyone with thesis alignment and don't close any doors. CVCs like to work with institutional investors as it validates capital appetite beyond strategic value. CVCs are sometimes less willing to lead but many will co-lead. And, it's often stage-dependent. At Pre-Seed, you're better off focusing on Pre-Seed investors, friends, and family. CVCs typically enter at Series A when there's more traction and de-risking, unless they're an early customer who wants to be involved from the start.

Question:  What are the standard ask levels (i.e., raise amounts) and valuation expectations between Pre-Seed and Seed? Does Seed suggest you have already taken investment by either a SAFE or a convertible note?

Answer:  Generally, companies give away 15-25% equity in each raise. Lead investors often require 10% minimum ownership, which drives round dynamics. For Pre-Seed, valuations typically range from $5-20M, with raise amounts of $1-3M. For Seed rounds, there's even more variability. Round labeling matters - using the right label for your stage is important for future fundraising success.

Question:  What are healthy equity ranges to give up when joining a top accelerator?

Answer:  Consider whether the accelerator is exceptional or if you'd be better off on your own. If you've been trying for a year without success, even a highly dilutive opportunity might be worth it if it gives you a shot. YC takes about 7% equity. This can be worth it because YC companies often raise their next institutional round immediately after the program. For other accelerators, evaluate whether they can deliver similar outcomes - if all you're getting for 5-10% dilution is busywork without capital, connections, or customers, it's probably not worth it.

Question:  How should a startup raise Pre-Seed and angel funding without a network?

Answer:  Most founders don't start with a network. You can build one by: 1) Connecting with other founders in non-competitive spaces who can make introductions, 2) Approaching VCs early for feedback to form relationships, 3) Participating in pitch events like accelerators or competitions for exposure. The best thing you can do is build something people want to see and share. De-risk your opportunity, and the network will appear. 

Question:  What are the right metrics or milestones to hit before raising Pre-Seed or Seed? What traction is expected?

Answer:  The bar for Pre-Seed has risen, and revenue requirements are becoming more important, with some Pre-Seed investors now wanting to see near-term revenue. These days, investors look for customer validation (LOIs or documented customer conversations) and progress toward a solution (working prototype). That said, team quality is the primary factor - who you are and your ability to execute matters most. The next biggest question is whether the opportunity is fundamentally venture-scale. Scientific risk should be eliminated by Pre-Seed stage (TRL 3-4), and technology risk should be significantly reduced by Seed stage (TRL 5-7). 

Question:  Can you share examples of successful Seed raises in the last 3-6 months and any common variables?

Answer:  It's hard out there. One founder we know recently went out for a large Series A before the market thought they were ready, had to scramble, and ended up with a Seed+ round. Another founder in a "sexy" space (one getting media attention) was able to do an uncapped note with a small discount ahead of their A, despite not being ready for an A round, purely because of market interest in their sector. Success factors are highly variable and company-specific.

Question:  How should founders prepare for a fundraising round?

Answer:  1) Prepare your team - fundraising is a full-time job for the CEO. 2) Prepare your materials - have your data room, deck, FAQ document, pro forma, etc. ready before starting. 3) Build a large funnel of potential investors and approach some 2-3 months before raising for feedback. 4) Plan for many conversations (100+ for Pre-Seed, 200+ for Seed) concentrated in a 3-4 week period. Aim to run a tight process with deadlines (avoid raising in December or August). For Pre-Seed, focus your materials on market opportunity, customer demand, and team strength. Include a competitive landscape - investors will research competitors anyway. Financial models don't need to be perfect at Pre-Seed but become more important at Seed and Series A.

Question:  What are the top 3 things that will get a company from pitch to diligence with investors?

Answer:  Three main things: team, TAM (market size), and traction. It's about who you are, what you're building, how big it can be, who else is in the market, how you'll maintain defensibility against competitors, and who may already be buying your solution.

Question:  How should a startup with a smaller market size but strong exit potential engage VCs when they don't match VC power law thinking?

Answer:  Ask yourself what kind of business you want to build. If VCs are saying it's not venture-scale, you can either pivot to fit their model or build a profitable business with different capital sources. Companies that don't match the VC model shouldn't raise from VCs. Consider angels or family offices with different return expectations. Also consider whether your technology could be applied to broader markets beyond your initial niche.

There are more wealthy people who've built non-venture-scale businesses than venture-backed ones.

Question:  What are red flags to look out for with an investor during a first meeting?

Answer:  Investors should respect founders' time, have explicit next steps, and focus on understanding the founder and business. If their first question is "who else is investing," they're likely a follower who won't write the first check. Other red flags can include: 1) Cagey answers about whether they have capital to deploy, 2) Showing up completely unprepared despite receiving materials in advance, and 3) Being invested in your competitors without disclosing this information.

Question:  Is it a poor look if a founder is working part-time on the startup prior to raising a Seed round?

Answer:  For Pre-Seed, it's understandable to have a job while de-risking your company. Ensure there are no IP conflicts with your day job. However, if you've already raised a Pre-Seed and are still working elsewhere, that's a huge red flag.

Question:  Do you recommend avoiding co-leads at an early stage like Pre-Seed?

Answer:  Pre-Seed rounds are usually "party rounds" with multiple investors and no clear lead. Having two leads that both want in is a great problem to have, but it's an edge case. There's no one way to build a round with co-leads; once you have interest from two or more parties to lead/co-lead, have an open conversation with both of them and figure out a path forward that doesn't create a headache for you down the line.