Traders are spending 24% much less time pitch decks in 2022, in comparison with 2021. On common, you’ve just below three minutes to persuade them to take a gathering with you. In reality, for decks that fail to lift funding, traders hand over in simply 2 minutes and 13 seconds. That’s not plenty of time to make a primary impression, so that you’ve received to make it rely.
It’s fairly uncommon that I get to speak to somebody who’s as large of a pitch deck nerd as I’m, however once I was lastly capable of nerd out with the analysis lead at DocSend, how might I not? We go deep into what the information tells us about what makes a pitch deck profitable, and indicators for what works much less properly.
The largest pattern change in how traders are pitch decks is that traders are spending rather a lot much less time on slides total, however the place that point is spent is shifting.
“This yr, we all know that traders are spending much less and fewer time on pitch decks. That’s not essentially shocking: The variety of hyperlinks to pitch decks despatched out has gone up, and the time spent on decks is staying very low,” explains Justin Izzo, analysis lead for DocSend. “What’s shocking to me is that we all know that the product and enterprise mannequin sections of decks are actually the place traders favored to lean in, particularly for firms on the early levels. However traders have nearly halved their time spent on these sections on the pre-seed degree. Traders are nonetheless giving scrutiny to those sections, however they’re doing it a lot extra shortly than ever earlier than. So founders have to actually suppose deeply about their enterprise, however talk briefly.”
One of many greatest shifts is that traders spend much more time on what DocSend describes as the aim of a startup slide — the “why are you doing this” a part of the story.
“Founders have to actually suppose deeply about their enterprise, however talk briefly,” laughs Izzo, “I wish to name it ‘compelling brevity.’ It isn’t simple to do, thoughts you, however it’s what founders must be striving for.”
The third-longest-viewed part is the Firm Goal part (after the product and enterprise mannequin sections), however Izzo factors out that this part is often solely a really small a part of the slide deck, usually only a line or two of textual content on slides one or two of the deck.
“Often it’s one sentence, a pointed and well-balanced assertion of what the corporate is. We often see that on the very entrance of the deck, usually on the intro slide. What was surprising to me once I first began our newest dataset, was that over the previous couple of years, it’s been form of middling when it comes to viewing instances,” says Izzo. “This yr, it actually shot up, and traders are usually utilizing this part as a form of gatekeeper. They wish to know at a look whether or not this firm has a motive to exist earlier than even going by the remainder of the deck.”
That makes plenty of sense; a enterprise function assertion is commonly formulated as “Venmo for Fundraising” or “Remodel buyer experiences with human-centered AI” or “Subject-tracking SaaS for Bodily Product Builders.” By the way, these are all actual examples from our Pitch Deck Teardown collection. The nice factor is that traders can use these statements to see if the funding would possibly probably be a great match with their funding thesis. Should you don’t spend money on SaaS, or if you happen to don’t care about fintech, or if you happen to couldn’t give a crap about buyer help — that turns into a really fast filter to offer a startup group a “no,” without having to go deep on product, group or market measurement.
“It’s whether or not founders can talk a imaginative and prescient and specificity however what their firm does, in in a compelling manner. As a result of if you are able to do that, you understand, you’re hooking traders, you’re displaying that there’s this thesis match, after which that will get traders prepared, you understand, primed to learn the remainder of their story,” says Izzo. “And you understand, doing this in a sentence, sentence and a half or one thing like that, is difficult to do. However we’re seeing it turns into a lot extra necessary for early-stage founders.”
Slides in profitable versus unsuccessful decks
The DocSend group analyzed 320 decks and checked out which slides have been current in every. The one slide that was out there in 100% of decks, each profitable and unsuccessful, was Crew, however from there, issues begin various a bit.
Probably the most attention-grabbing distinction between profitable and unsuccessful decks is the slides which can be lacking; I used to be shocked that solely a couple of quarter of startup decks had financials (belief me on this one, you actually need an working plan), however I used to be unsurprised that not one of the failed decks had financials.
The opposite large distinction is competitors slides; all decks ought to have an outline masking the aggressive panorama.
“The very first thing that’s lacking is commonly a contest slide. Founders usually don’t suppose to incorporate it, or after they do, they’re utilizing it as a not-so-subtle indicator that there is no such thing as a competitors,” laughs Izzo. “I all the time inform them to incorporate some form of evaluation of different gamers within the area, nonetheless you outline that area.”
DocSend’s group created a fundraising playbook of kinds, and a “state of the union” report for fundraising, evaluating the shifts from 2021 to 2022, which makes for a captivating in-depth learn to tell the way you’re your fundraising course of.