Investors will spend 24% less time watching pitch decks in 2022 compared to 2021. On average, you have just under three minutes to convince them to meet with you. In fact, for decks that failure to raise funding, investors give up in just 2 minutes and 13 seconds. That’s not a lot of time to make a first impression, so you need to make sure it counts.
It’s quite rare that I speak to someone who is as big a pitchdeck nerd as I am, but when I was finally able to talk to the research leader of DocSend, how could I not? We take a deep dive into what the data tells us about what makes a pitch deck successful, as well as indicators of what works less well.
The biggest trend change in the way investors view pitch decks is that investors generally spend much less time on slides, but Where that time is spent shifts.
“This year we know that investors are spending less and less time on pitch decks. That’s not necessarily surprising: the number of links sent to pitch decks has increased and the time spent on decks remains very low,” explains Justin Izzo, research leader of DocSend. “What’s surprising to me is that we know that the product and business model sections of decks are really where investors like to lean into, especially for early-stage companies. But investors have nearly halved their time spent on these pre-seed-level sections. Investors still keep a close eye on these sections, but they’re doing it so much faster than ever before. So founders really have to think deeply about their company, but communicate briefly.”
One of the biggest shifts is that investors are spending 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 should think carefully about their company, but communicate briefly,” laughs Izzo, “I like to call it ‘compelling brevity’. It’s not an easy thing to do, mind you, but it’s what founders should strive for.”
The fundraising timeline varies. This year, 25% of startups raised money in less than six weeks; 58% raised in less than 12 weeks; 70% increased in less than 18 weeks; 90% increased in less than 24 weeks. Last year the pace was a bit slower. Chart credit: DocSend.
The third longest viewed section is the Business Purpose section (after the product and business model section), but Izzo points out that this section is usually only a very small portion of the slideshow, often scrolling just a line or two of text one or two of the deck.
“Usually it’s one sentence, a pointed and balanced statement of what the company is. We usually see that at the very front of the deck, often on the intro slide. What was shocking to me when I first started looking at our latest dataset was that it’s been pretty mediocre in terms of watch times over the past few years,” says Izzo. “This year it really skyrocketed and investors tend to use this section as a sort of gatekeeper. They want to know at a glance if this company has a reason to exist before they’ve gone through the rest of the deck.”
That makes a lot of sense; a business purpose statement is often phrased as “Venmo for fundraising” or “Transforming customer experiences with human-centric AI” or “Issue-tracking SaaS for physical product developers”. These are all real examples from our Pitch Deck Teardown series. The great thing is that investors can use those statements to see if the investment might fit well with their investment thesis. If you don’t invest in SaaS, or if you don’t care about fintech, or if you don’t care about customer support, that becomes a very quick filter to give a startup team a “no” without having to worry about deeply. address product, team or market size.
“It’s about whether founders can communicate a vision and specificity, but what their company does, in a convincing way. Because if you can do that, you know, you’re hooking up investors, showing that this thesis fits, and then investors are ready, you know, ready to read the rest of their story,” Izzo says. “And you know, doing this in a sentence, a sentence and a half or something like that is hard. But we see it becoming so much more important for budding founders.”
Slides in Successful vs. Unsuccessful Decks
The DocSend team analyzed 320 decks and looked at which slides were present in each deck. The only slide available in 100% of the card games, both successful and unsuccessful, was Team, but from there things start to vary a bit.
Successful decks. Chart credit: DocSend.
The most interesting difference between successful and unsuccessful decks is the missing slides; I was surprised that only about a quarter of the startup decks had financial data (trust me, you really need an operational plan), but I wasn’t surprised that none of the failed decks had financial data.
Slides into failed decks. Chart credit: DocSend.
The other big difference is competition slides; all decks must have an overview of the competitive landscape.
“The first thing that is missing is often a competition slide. Founders often don’t think about including it, or if they do, they use it as a not-so-subtle indicator that there’s no competition,” laughs Izzo. “I always tell them to include some sort of analysis of other players on the field, however you define that field.”
DocSend’s team created a fundraising script of sorts, and a “state of the union” report for fundraising, comparing the shifts from 2021 to 2022, making for a fascinating in-depth read to inform how you view your fundraising process.
