By Serafina Lalany
We just closed a six-week recruitment cycle for Onward FX. Our team is reviewing close to 1,000 startups (the vast majority pre-seed through Series A), and there’s a pattern that keeps showing up that hard to ignore.
Traction numbers that would have turned heads at seed two years ago are now the baseline at pre-seed. Product velocity is faster. Revenue metrics are sharper. The founders applying are more prepared, more resourceful, and more disciplined than any cohort I’ve seen.
That should be a purely good sign. But it also tells you something about what has happened to the category. If pre-seed now requires what seed used to require, then pre-seed isn’t really pre-seed anymore. The label stayed. The stage underneath it shifted.
Which raises the structural question: what fills the space that pre-seed was originally designed for? The thesis-stage founder. The first check. The moment before metrics exist. If every defined round has moved one step later, there’s a gap forming at the front of the pipeline that nobody has named yet.
Every round moved one stage later
There was a time when pre-seed meant something different. You had a thesis, maybe a rough prototype, and enough conviction to get someone to bet on you before the metrics existed. The whole point was to turn a napkin sketch into a real company.
That version of pre-seed is getting harder to find.
What I’m hearing from founders right now is a familiar set of responses dressed up in different language:
- “We’d love to see more traction first”
- “The narrative needs to be sharper”
- “Check back in when the picture is clearer”
If you’re a founder hearing this, it can feel like the rules changed and nobody sent you the memo. The explanation is structural, and it starts further down the chain than most people realize.
The incentive chain
No early-stage fund exists on its own. Every check written at pre-seed is, in part, a bet on what happens next. Will the next investor in the sequence validate the price, mark it up, and keep the momentum going?
That’s the real feedback loop at the earliest stages. Long before anyone talks about exits or DPI, the question is simpler: does this company attract a strong follow-on round?
And right now, the investors writing those follow-on rounds are pulling back in ways that reshape everything upstream:
- Deploying into fewer companies per fund
- Concentrating larger checks into a narrower set of bets
- Passing on anything that requires patience to explain
The concentration is real. According to PitchBook, 41% of all U.S. venture dollars in 2025 went to just 10 companies. Eight were AI plays.
That level of concentration has a cascading effect. When the bulk of capital chases a handful of deals, the rest of the market recalibrates. Consensus tightens. And the pressure to conform to what “works” moves earlier and earlier in the stack.
The result is that pre-seed investors increasingly optimize for what they think will clear the next gate:
- Sectors where the market consensus is already formed
- Signs of traction that reduce ambiguity early
- Pitches that move cleanly through a partnership meeting
- Founding teams built to endure a longer, harder path to the next round
I don’t think this is what pre-seed was designed to be. The earliest check was supposed to fund exploration, to give founders room to learn before the numbers had to speak for themselves. But investors are responding to what the broader market is selecting for, and right now it’s selecting for certainty.
Knowing that doesn’t make the “no” feel better, but it reframes the conversation. The rejection says more about how the system is wired right now than it does about your company
Now multiply that by geography. What often gets lost in the national conversation is that this tightening doesn’t land evenly.
Coastal markets have built-in shock absorbers. Even in a down cycle, there’s still a baseline of angel activity, seed-stage fund density, warm intro networks, and meeting volume that keeps the earliest deals moving. Slower, maybe. But moving.
In most of the Heartland, that baseline was always thinner. So when pre-seed tightens at a national level, the impact here is disproportionate. The margin for error was already narrow, and now it’s narrower.
A first-time founder in the middle of the country trying to raise half a million dollars to validate an idea faces a different reality than someone in San Francisco or New York. The market is often just absent. The meetings happen at a lower frequency. The intro networks are sparser. The funds that once wrote early, conviction-driven checks have either shifted upstream or slowed their pace.
That’s how deal pipelines erode. The founders are out there, but the first door needs to open sooner.
Building the missing layer
This is what that gives me hope. Across the Heartland, I’m watching people decide not to wait for the national market to rebalance. Instead, they’re assembling the connective infrastructure themselves. The kind that makes the earliest introductions possible.
That takes different forms in different places:
- Angel groups organizing with more intention and rigor (Endeavor Heartland)
- Operators opening their networks instead of offering advice from the sideline ( Zap ⚡️ )
- Corporations stepping into early customer roles deliberately (Tyson Ventures)
- Community leaders building the rooms where founders and investors actually sit together (Arkansas Economic Development Commission Northwest Arkansas Council Onward HQ)
In Arkansas, that’s what Onward FX is trying to be. A founder-funder exchange designed to shorten the distance between a strong founder and a well-matched investor.
The mechanics are straightforward:
- Curate the founders
- Curate the investors
- Match on actual fit
And let the conversation start where it should.
This may not replace a fully functioning venture ecosystem. But it is an answer to a real bottleneck, and it’s designed to put founders first.
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