The biggest trend change in how investors are looking at pitch decks is that investors are spending a lot less time on slides overall, but where that time is spent is shifting.
“This year, we know that investors are spending less and less time on pitch decks. That’s not necessarily surprising: The number of links to pitch decks sent out has gone up, and the time spent on decks is staying very low,” explains Justin Izzo, research lead for DocSend. “What’s surprising to me is that we know that the product and business model sections of decks are really where investors liked to lean in, especially for companies at the early stages. But investors have almost halved their time spent on these sections at the pre-seed level. Investors are still giving scrutiny to these sections, but they’re doing it so much more quickly than ever before. So founders have to really think deeply about their business, but communicate briefly.”
One of the biggest shifts is that investors spend a lot more time on what DocSend describes as the purpose of a startup slide — the “why are you doing this” part of the story.
“Founders have to really think deeply about their business, but communicate briefly,” laughs Izzo, “I like to call it ‘compelling brevity.’ It isn’t easy to do, mind you, but it is what founders should be striving for.”
The timeline to fundraising varies. This year, 25% of startups raised in less than six weeks; 58% raised in less than 12 weeks; 70% raised in less than 18 weeks; 90% raised in less than 24 weeks. Last year, the pace was a little bit slower. Graph Credit: DocSend.
“It’s whether founders can communicate a vision and specificity but what their company does, in in a compelling way. Because if you can do that, you know, you’re hooking investors, you’re showing that there is this thesis fit, and then that gets investors ready, you know, primed to read the rest of their story,” says Izzo. “And you know, doing this in a sentence, sentence and a half or something like that, is tricky to do. But we’re seeing it becomes so much more important for early-stage founders.”
Slides in successful versus unsuccessful decks
The DocSend team analyzed 320 decks and looked at which slides were present in each. The only slide that was available in 100% of decks, both successful and unsuccessful, was Team, but from there, things start varying a bit.
Successful Decks. Graph Credit: DocSend.
The most interesting difference between successful and unsuccessful decks is the slides that are missing; I was surprised that only about a quarter of startup decks had financials (trust me on this one, you really need an operating plan), but I was unsurprised that none of the failed decks had financials.
Slides in unsuccessful decks. Graph Credit: DocSend.
The other big difference is competition slides; all decks should have an overview covering the competitive landscape.
“The first thing that’s missing is often a competition slide. Founders often don’t think to include it, or when they do, they are using it as a not-so-subtle indicator that there is no competition,” laughs Izzo. “I always tell them to include some kind of analysis of other players in the field, however you define that field.”
DocSend’s team created a fundraising playbook of sorts, and a “state of the union” report for fundraising, comparing the shifts from 2021 to 2022, which makes for a fascinating in-depth read to inform how you’re looking at your fundraising process.