Pre-seed investors look for proof that one unit can eventually make money after its direct costs. They want a clear parts list, realistic pricing, and a path to margin at scale.
Unit economics means the revenue and cost for one unit sold. Pre-seed means the earliest outside funding, often before full production. Investors use these numbers to judge risk, not to expect profit yet.
Table of Contents
- What counts as one unit?
- Can you make money on one unit?
- What changes with volume?
- What can you show before sales?
What counts as one unit?
Define the unit the same way a customer buys it. That may be one device, one pack, one machine, or one production run. Keep accessories, installation, and service separate unless buyers must pay for them together.
List what the buyer pays and what you must spend to deliver that exact unit. Include materials, bought parts, packaging, assembly labor, shipping, and payment fees. Leave out rent, salaries, and other fixed costs at this stage.
Can you make money on one unit?
Investors first check contribution margin: price minus all direct costs for one unit. A negative number is common at pre-seed, but founders should know why it is negative and what would fix it.
Break costs into items you can control or negotiate: Show quotes, prototypes, or supplier emails behind the largest costs. A simple example helps: if fasteners cost little but a sensor costs a lot, explain the plan for that sensor.
- bill of materials and bought components
- assembly, test, and rework time
- scrap, defects, and returns
- freight, packaging, duties, and transaction fees
What changes with volume?
Many manufacturing costs fall as volume rises, but not by guesswork. Explain which costs drop through better tooling, fewer setups, lower scrap, or bulk buying. Name which costs stay flat, such as heavy parts or regulated testing.
Show two or three volume levels, such as pilot, contract run, and owned line. Keep labor, cycle time, and yield visible at each level. This lets an investor see when the unit could turn positive without claiming exact timing.
What can you show before sales?
Before revenue, show evidence that prices and costs are real. Bring a current bill of materials, supplier quotes, shop time estimates, and target pricing from customer talks. Note where numbers are firm and where they are estimates.
Track cash needs around the unit, such as deposits, minimum orders, lead times, and inventory. Long lead times can trap cash even when margin looks good. Bring a one-page sheet that ties unit cost, price, lead time, and next cost reduction to a specific build.