Let me say the quiet part out loud.

Pre-seed changing its meaning in the UK is not new. That ship sailed years ago. Most founders raising today already know the stage has been quietly inflating. That conversation is old.

What is new is something more specific. And honestly, more troubling.

AI.

Investors now have access to the same AI tools everyone else has. And somewhere along the way, a growing number of them started to believe that using those tools makes them better at early-stage investing.

It does not.

What AI actually does in this context is give someone with limited early-stage experience a confident-sounding script. It produces lists of questions that look rigorous on paper. It generates frameworks that were built for due diligence on a Series B and applies them to a founder who launched three months ago and does not yet have a product.

The experience gap has not closed. It has been papered over. And for founders at the very earliest stage, that gap is now wider and harder to see.

That is what I want to talk about.

Over the past few months I have been speaking to a lot of investors. Some conversations were energising. Some were frustrating. Some were honestly confusing.

A clear pattern started to show.

In several cases I could not even get on a call before being asked to prepare materials. Detailed financial projections. Customer acquisition assumptions. Hiring plans. Market sizing logic. Even exit thinking.

All this for something that is still at pre-seed.

At first I thought it was just bad luck. Then I started hearing the same stories from other founders. Quietly, even some investors admit this is becoming normal.

But this is not just about rising expectations anymore. It is about where those expectations are coming from. And that changes everything.

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Continue…

The first story is not even mine.

One of my investor friends introduced another investor to a founder from his portfolio. A warm intro. Strong founder. Legitimate opportunity.

Before even agreeing to a call, the second investor sent a document. Ten pages of questions.

Everything from detailed projections to operational assumptions. The founder was asked to reply to all of it before the investor would even consider speaking.

Ten pages. Before a first conversation. Founder has rejected the intro.

The second story is mine.

A couple of months ago I pitched an investor. We had a few meetings. Good energy. Good discussion. Then I received another document.

Twenty-five pages of questions.

From the history of the company's inception to detailed exit scenarios. From early acquisition assumptions to structured execution plans.

Again, this is pre-seed.

This is not an isolated situation. This is becoming the reality many founders are facing.

The uncomfortable truth is that "pre-seed" is now a global term with very local meanings.

In the US, pre-seed is still largely about belief.

Belief in the founder. Belief in ambition. Belief in the size of the problem.

Validation helps. A prototype helps. Early users help. But these are signals, not always strict requirements.

In the UK, pre-seed often looks like early seed.

Investors want traction. Structured go-to-market thinking. Evidence of demand. Sophisticated financial models. Clear hiring logic.

Sometimes even clarity on exit strategy before the product truly exists.

The stage that is supposed to fund exploration increasingly demands predictability.

And exploration is not predictable.

Early-stage investing is supposed to be risky. That is the point.

But in the UK we also have a system designed to reduce that risk significantly.

The Seed Enterprise Investment Scheme (SEIS) gives investors income tax relief of up to 50% on their investment - up to £200,000 per year. There are also capital gains tax exemptions on profits from shares held for at least three years, and loss relief that can be offset against other income if the investment fails.

In simple terms, a meaningful portion of the downside risk is cushioned by the government.

Yet despite this safety net, requirements from founders at the earliest stages keep rising.

More proof. More structure. More certainty.

It creates a strange situation where founders are asked to remove uncertainty from a journey that is fundamentally uncertain.

There are historical and structural reasons behind this.

In the US, many early investors are former operators. People who built companies themselves. They have seen pivots. They have experienced chaos. They understand how messy the journey from zero to one really is.

In the UK, a significant share of early capital is controlled by people from professional environments. Banking. Consulting. Corporate roles. Fund management.

These are smart individuals. Disciplined. Analytical.

But many have never built a business from scratch.

They have not lived through the emotional volatility of startup life. They have not made payroll decisions with weeks of runway left. They have not rebuilt strategy multiple times in a year.

Startup building is not a spreadsheet exercise. It is experimentation under pressure.

There is another layer shaping these interactions.

Everyone now has access to AI tools. Founders use them. Investors use them. Analysts use them.

AI gives structured answers. Logical frameworks. Beautifully written assumptions.

But early-stage startups are not logical frameworks. They are messy bets on the future.

I have sat in meetings where investors were clearly reading questions from a screen. Questions that sounded correct on paper but disconnected from reality.

Requests for precise CAC assumptions for products still being defined. Five-year projections for markets that are still forming. Operational detail for teams that do not yet exist.

Ironically, in some cases AI has not made people smarter. It has made them more confident in asking the wrong questions.

Data supports this uncertainty.

Research by CB Insights found that 42% of startups fail because there is no real market need - making it the single biggest reason companies collapse. Others fail due to timing, business model changes or competitive pressure.

Early assumptions are wrong more often than they are right.

Companies like Airbnb struggled to raise their first funding - Brian Chesky pitched seven investors in Silicon Valley, five sent rejections and two never replied. Investors simply could not see where it was going.

Stripe began in 2010 as a simple developer tool - two brothers frustrated by how hard it was to accept payments online. Within two weeks they had processed their first transaction. Long before becoming global financial infrastructure.

Uber launched as a niche black-car service in San Francisco in 2011, charging roughly 1.5x the price of a regular taxi. UberX - the mass-market version most people use today - did not launch until 2012.

Even Europe's own Revolut lost 40% of its revenue overnight when the pandemic shut down global travel in 2020 - the core use case that built the business. They rebuilt, adapted and ended the year 50% ahead of pre-Covid revenue levels.

None of these journeys followed clean five-year plans. They were shaped by experimentation, pivots and uncomfortable decisions.

What worries me is not that investors ask hard questions. They should.

What worries me is that real risk appetite seems to be shrinking at the exact stage where risk is supposed to be embraced.

According to Dealroom data, the UK remains Europe's largest venture market by capital deployed - raising nearly $22 billion in 2023, more than France and Germany combined. Yet the trend is clear: funding growth is concentrated at later stages, in companies that are already proven.

Fewer bold bets are being made at inception.

When ecosystems shift from funding exploration to funding optimisation, breakthrough innovation becomes harder.

Some founders now joke that there are only two real stages in the UK.

Stage one. Figure everything out yourself.

Stage two. Series A.

It sounds dramatic. But there is truth behind the joke.

If pre-seed requires seed-level traction, then what is the real purpose of the stage?

Maybe the term has lost meaning.

Maybe we should be honest and rename it.

Maybe it is no longer pre-seed.

Maybe it is simply "figure it all out yourself."

This is not an attack on investors. Many are thoughtful, supportive and genuinely founder-first.

But expectations at the earliest stage feel increasingly disconnected from reality.

What should pre-seed actually mean today?

How much uncertainty should investors accept?

How much proof should founders realistically be expected to provide?

And are we slowly building an ecosystem that rewards safe bets over bold ideas?

If you are a founder raising right now, what has your experience been?

If you are an investor, how do you define real early-stage risk?

And should we scrap the term "pre-seed" in the UK altogether?

Because right now, for many founders, it feels like there are only two real stages.

Figure it all out yourself.

Then maybe someone will fund you.

✅ Know a founder raising right now? Send this to them. Know an investor who gets it? Send it to them too. The gap between how pre-seed works and how it should work does not close on its own.

(👉 Vote now — we’ll share the results in next week’s issue. All votes are anonymous.)

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