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New analysis shows pitch deck interactions increased 25% year-over-year; VCs are sprinting through pitch decks in 2 minutes, 44 seconds on average
SAN FRANCISCO, Oct. 19, 2021 /PRNewswire/ -- DocSend, a secure document sharing platform and Dropbox (NASDAQ: DBX) company, released new data analysis based on its Pitch Deck Interest metrics showing that startup founder and investor activity continued to post year-over-year (YoY) gains in the third quarter of 2021. At the same time, the data also shows that the amount of time investors spent reviewing pitch decks hit a record low.
Through its Pitch Deck Interest, DocSend tracks activity and engagement on pitch decks (shared via DocSend) to analyze investors' hunger for deals and founders' quest for capital. Its metrics analyzes the following:
Founder links created: How many pitch decks founders are sending out to investors
Investor deck interactions: The number of pitch decks investors are reviewing from founders
Investor time spent: How long investors spend reading pitch decks
The overall supply of founders seeking funding – measured via pitch deck link creation per founder – increased 26% year-over-year in Q3. Pitch deck interactions from VCs is an indicator of demand in the market and increased 25% year-over-year in Q3. Despite a return to travel during the summer vacation months, investor activity continued to outpace engagement metrics from 2020 and previous years.
Growth in founder activity and investor interest has been steady over the last year after the initial pandemic slump in March 2020. Pitch Deck Interest data for the first nine months of 2021 show that the market remains strong, with founder links created up 34% and pitch deck interactions up 41% year-over-year for this time period.
With record-breaking deal dollars going into funding startups this year, VCs are pouring over pitch decks at breakneck speed to keep up: time spent on deck was down to 2 minutes, 44 seconds, a decrease of 2.5% since Q2 2021 and down 4.5% from a year ago.
The year-over-year comparison of investors' time spent on decks shows a consistent push to get through pitches faster, with the average time continuing to tick down. The year-to-date (YTD) comparison shows a more dramatic decline, down 12.3% from 3 minutes and 10 seconds in 2020 to 2 minutes and 47 seconds in 2021.
DocSend's analysis shows that the time spent on deck metric has been fairly constant on a weekly basis for years, so the quarterly and yearly decreases are notable. During Q3, time spent saw a record low of 2 minutes and 36 seconds, and the average was down from Q2's average of 2 minutes and 46 seconds.
"While 2020 showed dramatic increases in fundraising activity, the consistent gains in investor engagement and founder pitches so far this year are clear signs of stable growth in the fundraising landscape," said Russ Heddleston, DocSend Co-Founder and Head of Commercial, DocSend at Dropbox. "Yet despite the fundraising fervor of the current venture capital market, early stage startups can't be complacent with their pitch decks. With only 2 minutes and 44 seconds on average to capture an investor's interest, startups need to be proficient in communicating their value proposition and business fundamentals more than ever."
Key Leading Indicators of VC Fundraising Activity
The Pitch Deck Interest metrics are part of the DocSend Startup Index (DSI) and measure activity via three key indicators of founder and investor engagement. The insights help startup founders better understand fundraising conditions, especially in the recovering yet still volatile COVID-19 landscape. The DSI anonymizes, aggregates and compiles Pitch Deck Interest metrics in real-time and reports on changes on a weekly basis and is a leading indicator of future deal flow and fundings.
There are three core metrics. First, a "link" refers to the unique URL a founder creates with DocSend to share their pitch deck with investors. Each investor should get a unique presentation with the most pertinent and up-to-date information, so every time a founder sends a new pitch, they generate a new link.
Founder links created - the average number of pitch deck links each founder is creating on the DocSend platform, which serves as a proxy for supply of startups seeking funding. A "link" refers to the unique URL a founder creates with DocSend to share their pitch deck with investors. Each investor should get a unique presentation with the most pertinent and up-to-date information. When the average number of links increases, it means that founders are sending their decks out to more investors.
Investor deck interactions - the average number of investor interactions for each pitch deck link created by founders on the DocSend platform, which can serve as a proxy for demand for investments. The higher the interaction metric, the more often decks are viewed, shared and revisited by potential investors.
Investor time spent - the average time spent per pitch deck by potential investors. This metric offers a look at how long VCs are spending reviewing deals. More time spent per deck could mean investors are more closely scrutinizing deals.
DocSend releases quarterly analyses via the Pitch Deck Interest metrics to track and predict the investment landscape and better inform founders about the volatility or stability of the venture capital environment.
Follow Russ Heddleston on Twitter for a synopsis of each week's fundraising data.
DocSend enables companies to share business-critical documents with ease and get real-time actionable feedback. With DocSend's security and control, startup founders, investors, executives, and business development professionals can build business partnerships that have a lasting impact. Over 24,000 customers of all sizes use DocSend today. Learn more at docsend.com.
Dropbox is the one place to keep life organized and keep work moving. With more than 700 million registered users across 180 countries, we're on a mission to design a more enlightened way of working. Dropbox is headquartered in San Francisco, CA, and has offices around the world. For more information on our mission and products, visit http://dropbox.com.
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