Data Scout is Localogy’s series that curates and draws meaning from third-party data. Running semi-weekly, it adds an analytical layer to the industry data that we encounter in daily knowledge building. For Localogy original data, see the separate Modern Commerce Monitor™️ series.
Pitch decks are an art and a science. And of course, there are several different types of pitch decks. Zeroing in on a funding pitch, there are proven tactics to best capture a startup’s value and attractiveness to a give investor, especially at the seed stage when there’s less market validation.
As an offshoot of our ongoing Funding Watch series, we’re tackling this question. And to do that, we’ve enlisted DocSend, whose 2020 pre-seed research report contains lots of useful data. By analyzing hundreds of pre-seed pitch decks — and their outcomes — it’s gained an informed position.
For those unfamiliar, DocSend has become a standard in distributing pitch decks to investors. Not only do startups get a structured and secure way of transmitting decks, but they can see data about investors’ engagement, including time-per-slide and other metrics. So that’s where these data derive.
The average time spent with pre-seed pitch decks was 3:21. This can be a discouraging figure, giving all of the hours put into a given pitch’s production. The lesson is that you don’t have a lot of time to capture an investor’s interest so choose wisely what to include and to front-load captivating material.
Speaking of slide sequence, there’s an art to the “story arc” and narrative that a pitch deck should tell. DocSend’s data suggest best practices for a specific sequence of slides. That includes starting by characterizing the company’s purpose, then on to the market problem, “why now?” and solution.
The rest of the sequence can be seen below, followed by a more detailed breakdown of the number of pages included per topic (on average), and the number of decks that contain each section. Interestingly, the “why now?” section correlates to successful decks that received eventual funding.
Beyond the tactics of what should go in the deck itself, there are broader measures of successful decks that trace back to the startup in question. For example, when looking at startup lifecycle, the biggest factor that correlates to successfully securing seed funding is whether or not its product is live.
Quality and Quantity…
As for what startups can expect in terms of the fundraising process, DocSend indicates that it is a lengthy one. The average fundraising time is 20.5 weeks and the number of investor meetings ranges from 20 to 40. There’s also a correlation between the number of meetings and dollar amount raised.
Contacting more investors results in more meetings and a greater chance of funding. But that correlation only exists to a certain point. After contacting 200 investors, the average amount raised declines, possibly due to weaker startups that require more meetings due to ongoing rejections.
See the full report (free) for more.