There is a sort of fuzzy line between Prehistoric Egypt and what one might think of as “proper” Ancient Egypt – and this gets called the Predynastic Period (or the Protodynastic Period) and it lasts from around 3200 to 3000 BCE.
At one point it was thought that Ancient Egyptian culture sprang essentially from nowhere – spontaneous generation fully formed from the “mud” of prehistoric Egypt like Athena from the brow of Zeus. This led (as you’d expect for Western culture of the late 19th and early 20th Century CE) to all sorts of rather outlandish and frankly racist theories about a superior race conquering Egypt and bringing Pharaonic culture with them. That’s all nonsense of course, and tells you more about colonial Europe than it does about Ancient Egypt.
The truth is that Pharaonic culture developed from the preceding prehistoric cultures and this is clearly evident in the Naqada III culture (another name for the Predynastic Period). This culture shows links both with what came before and what was to come after. During this period hieroglyphs were first used, there was a rise in fortified planned towns, and judging by their funeral goods the elites became more distinct from the masses. The settlements along the Nile in Upper Egypt were beginning to cohere into large groupings – the three main centres were at Abydos, at Naqada and at Hierakonpolis. Eventually these were unified under a single leader who also gained control of the Delta region – ushering in the first period of unity, the Early Dynastic Period.