Raising a pre-seed round in proptech.
At pre-seed, proptech investors back founders who know how real estate actually works and have picked one buyer to serve first. Here is what they look for.
Proptech
Proptech investors want to know exactly who buys (landlords, brokers, builders or tenants), how long that sale takes, and whether the business holds up when interest rates and the property cycle turn.
What pre-seed investors expect in proptech
There is little revenue yet. Investors judge the team, the buyer and the first conversations.
A team that knows real estate
- Someone who has worked in brokerage, building or property management
- An understanding of how deals and leases really close
- Relationships with the first buyers you will sell to
One clear buyer
- Landlords, brokers, builders or tenants: pick one first
- Who signs, who uses it and who pays
- Why that buyer will switch from today's tools or habits
Early proof of pull
- Letters of intent or pilots with property owners
- Interviews showing the cost of the problem
- Any licensing your model needs, and who will hold it
How the round comes together
Pre-seed proptech money often comes from people who made their careers in real estate.
- Angels from real estate
- Pre-seed funds
- Accelerators
Angels
Often leads
Developers, brokers and landlords write first checks and open doors to pilots.
Pre-seed & seed funds
Often leads
Pre-seed funds with a real estate or vertical software focus lead small rounds.
Accelerators
Sometimes
Proptech and real estate programs can connect you with owners and operators.
Family offices
Sometimes
Many families hold property and back tools that help their own portfolios.
SAFE or priced round?
Most pre-seed proptech rounds are SAFEs or convertible notes. Real estate angels may be used to property-style deal terms, so explain the SAFE clearly and know what your cap costs you.
The slides investors read first
Team
Who has worked in real estate, and where.
Buyer
Landlord, broker, builder or tenant, and who pays.
Problem
What the pain costs that buyer today.
First pilots
Who has agreed to try it, and on what terms.
The ask
Amount, instrument and the milestones it buys.
Questions founders ask
Do I need real estate experience to raise pre-seed in proptech?
It helps a great deal. Investors know property buyers are slow to change. A cofounder or advisor who has worked inside the industry makes your sales plan believable.
Does my proptech startup need a license?
It depends on the model. Brokerage, property management, lending and title work are often licensed by state. Ask a lawyer early and show investors your plan.
Sources
Sources: state licensing guidance for real estate activities; investors' published criteria; industry reports. Editorial content, reviewed quarterly. Not financial or legal advice.
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