Founders looking to raise pre-seed rounds should keep their investor pitch decks short and to the point.
That’s the main takeaway from a new report from DocSend Inc., which analyzed the amount of time early-stage investors spent looking through such presentations. On average this year, venture capitalists are spending about a minute less time looking through each pre-seed pitch deck they review than they did last year, according to the report released Tuesday.
“You have much less time than ever before to gain a VC’s attention and belief in your purpose as a company,” said Justin Izzo, a research lead at DocSend, which is a subsidiary of San Francisco’s Dropbox Inc (Nasdaq: DBX). “Think deeply, but communicate briefly.”
For its report, DocSend collected data from 2020 through this year on pitch decks sent through its file-sharing service, recording how much time investors spent looking both at particular slides and entire presentations. The company also surveyed founders to track which pitch decks successfully attracted pre-seed money from specific investors and which didn’t.
Overall this year, investors are spending an average of 2 minutes, 42 seconds reading each pitch deck from companies seeking pre-seed funding, according to the report. By contrast, in 2021 they spent an average of 3 minutes, 32 seconds on such presentations.
Investors this year have been quick to make decisions on pitch decks they don’t like. While they spent an average of 2 minutes, 46 seconds looking at the presentations of companies to which they later decided to invest pre-seed capital, they spent just 2 minutes, 13 seconds on pitch decks for companies they went on to reject, according to the report.
Investors have consistently spent the most time on the individual pitch deck slides that detail startups’ products and business models, DocSend said in its report. But they’ve also been increasingly scrutinizing startups’ raisons d’être.
So far this year, the pitch deck slide that has ranked no. 3, on average, in terms of the amount of time investors are spending with it, is the one talking about the startup’s purpose, according to the report. That slide ranked seventh last year and 13th in 2020.
That data indicates that when investors look at presentations, they’re starting with company’s purpose first to determine whether or not it’s worth their time to read the rest of the deck, Izzo said.
They’re asking, “Is this purpose clear? Does this compel me to read on (through) the deck? Does this early-stage company have a reason to exist?” he said.
