Behind the scene : fundraising pre-seed of an AI startup

A bit of feedback from our journey at our AI startup.

We started prototyping stuff around agentic AI last winter with very cool underlying tech research based on some academic papers (I can send you links if you're interested in LLM orchestration).

I'm a serial entrepreneur with 2x exits, nothing went fancy but enough to keep going into the next topic. This time, running an AI project has been a bit different and unique due to the huge interest around the topic. Here are a few insights.

Jan ~ Mar: Research

Nothing was serious, just a side project with a friend on weekends (the guy became our lead SWE).
Market was promising and we had the convinction that our tech can be game changer in computer systems workflows.

March ~ April: Market Waking Up

Devin published their pre-seed $20m fundraising led by Founders Fund; they paved the market with legitimacy. I decided to launch some coffee meetings with a few angels in my network. Interest confirmed.

Back to work on some more serious early prototyping; hard work started here.

April ~ May: YC S24 (Fail)

Pumped up by our prospective angels and the market waking up on the agentic topic, I applied to YC as a solo founder (was still looking for funds and co-founders). Eventually got rejected (no co-founder and not US-based).

May ~ July: VC Dance (Momentum 1)

Almost randomly at the same time we got rejected from YC, I got introduced to key members of the VC community by one of our prospective angels. Interest went crazy... tons of calls. Brace yourself here, we probably met 30~40 funds (+ angels). Got strong interests from 4~5 of them (3 to 5 meetings each), ultimately closed 1 and some interests which might convert later in the next stage.

The legend of AI being hype is true. Majority of our calls went only by word of mouth, lots of inbounds, people even not having the deck would book us a call in the next 48h after saying hi. Also lots of "tourists," just looking because of AI but with no strong opinion on the subject to move further.

The hearsay about 90% rejection is true. You'll have a lot of nos, ending some days exhausted and unmotivated.

End July: Closing, the Hard Part

The VC roadshow is kind of an art you need to master. You need to keep momentum high enough and looking over-subscribed. Good pre-seed VC deals are over-competitive, and good funds only focus on them; they will have opportunities to catch up on lost chances at the seed stage later.

We succeeded (arduously) to close our 18~24mo budget with 1 VC, a few angels, and some state-guaranteed debt. Cash in bank just on time for payday in August (don't under-estimate time of processing)

Now: Launching and Prepping the Seed Round

We're now in our first weeks of go-to-market with a lot of uncertainty but a very ambitious plan ahead. The good part of having met TONS of VCs during the pre-seed roadshow is that we met probably our future lead investors in these. What would look like a loss of time in the initial pre-seed VC meetings has been finally very prolific, helping us to refine our strategy, assessing more in-depth the market (investors have a lot of insights, they meet a lot of people... that's their full-time job).

We now have clear milestones and are heading to raise our seed round by end of year/Q1 if stars stay aligned :)

Don't give up, the show must go on.