In record-busting fundraising year, VCs are moving faster on investing decisions, reviewing pitch decks in record low time of 2 minutes, 28 seconds
DocSend, a secure document sharing platform and Dropbox (NASDAQ: DBX) company, released new data based on its Pitch Deck Interest metrics showing that investor and founder activity in the venture capital market posted significant year-over-year (YoY) gains in both the fourth-quarter and full-year 2021. VC engagement with startup pitch decks reached an all-time high in Q4, increasing 55% YoY and 44% across the full year.
The metrics indicate that the increasing amount of investment dollars pouring into early-stage startups is pressuring VCs to move faster in their process of seeking out and funding startups. To keep up with this furious pace, VCs reviewed pitch decks faster in Q4, with an all-time low “time spent on deck” metric of just 2 minutes, 28 seconds, a YoY decrease of 12% from Q4 2020.
Through its Pitch Deck Interest, DocSend tracks activity and engagement on pitch decks to analyze investors’ hunger for deals and founders’ quest for capital. Its metrics analyze 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
As venture capital funds amassed billions of dollars in 2021, opportunistic founders responded with increased pitching and fundraising. The overall supply of founders seeking funding – measured via pitch deck link creation per founder – increased 33% YoY in Q4.
And investor interest in those pitch decks increased 18% compared to the third quarter bringing strong funding momentum heading into 2022. VC engagement hit an all-time high in the first week of November averaging 43.6 interactions per pitch deck. For context, that level of engagement is 67% higher than the annual average of just 26.1 interactions per deck.
Even the expected seasonal dips in activity for investors and founders around the Thanksgiving and December holidays remained higher than the height of activity in 2020. The strength of activity in Q4 is reinforced when analyzing the full year of fundraising activity. Founder links increased 34% in 2021 and investor interactions with those decks (via DocSend links) increased 44% compared to 2020.
To pursue the more limited supply of startups seeking funding and compete with the other investors courting those startups, VCs raced through pitch decks at record speeds quickly making a call on if they were interested to learn more. The average investor’s time spent on a deck in 2021 was two minutes, 43 seconds, a 12% decrease from 2020.
“2021 was so busy compared to 2020 that even this year’s seasonal lulls were higher than last year’s all-time highs. As we close out the year, VCs are racing each other to get through pitch decks and sprinting to solidify deals,” said Russ Heddleston, DocSend Co-Founder and Head of Commercial, DocSend at Dropbox. “2021 further solidified the role of pitch decks in the fundraising process. While there was somewhat of a return to in-person meetings in the past year, it’s clear that the pitch deck has become both the calling card and the business plan for founders. VCs are quickly scanning decks and looking to go from pitch deck to term sheet faster than ever.”