DROPBOX, INC. SAN FRANCISCO, Jan. 12, 2022 /PRNewswire/ -- 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."
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.
- 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 link 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.
About DocSend
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 26,000 customers of all sizes use DocSend today. Learn more at docsend.com.
About Dropbox
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.
Media Contact:
Carol Boyko
104 West for DocSend
carol.boyko@104west.com
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