SAN FRANCISCO, July 23, 2020 /PRNewswire/ -- DocSend, a secure document sharing platform, today released quarterly data based on the Pitch Deck Interest metrics that show venture capital investor interest and engagement in startup pitch decks were up 26% in the second quarter of 2020, compared to 2019.
"Typically, we see a seasonal decline in both links created and overall interactions that starts in mid-May and extends through the summer, that's clearly not the case this year," said Russ Heddleston, DocSend co-founder and CEO.
"While many startups have endured cost-cutting measures and rounds of layoffs during the pandemic, a portion of companies with the right business models and market opportunities are being met with open arms by investors who are again becoming eager to source deals."
The top 10 weeks for interest in 2020 were all in Q2, peaking at week 25 (June 15) with 20.6 interactions per founder.
Key Indicators of VC Interest and Engagement
The Pitch Deck Interest metrics are part of the DocSend Startup Index and measure activity via three key indicators of investor engagement. The insights help startup founders better understand fundraising conditions, especially in the volatile COVID-19 landscape. The Index anonymizes, aggregates and compiles metrics in real-time and reports on changes via interactive charts on a weekly basis, focusing on three core metrics.
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 presentation with the most pertinent and up-to-date information, so every time a founder sends a new pitch, they generate a new link.
- Pitch Deck Interest - the average number of interactions for each pitch deck link created by founders on the DocSend platform, which can serve as a proxy for demand. The higher the interest metric, the more often decks are being viewed, shared, and revisited by potential investors.
- Founder Links Created - the average number of pitch deck links each founder is creating on the DocSend platform, which can serve as a proxy for supply. When the average number of links increases, it means that founders are creating and sharing more unique links to their pitch decks, meaning they're sending their decks out to more people.
- 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.
Founders Race to Raise Capital Amongst Uncertainty
Per founder, there was an 11% increase in the number of unique links created for Q2 year-over-year — 5.87 links in 2019 versus 6.52 links per founder in 2020, meaning founders are casting a wider net and sending pitch decks to more investors than in 2019. With COVID-19 stressing budgets and timelines, this could be a result of founders compressing their fundraising efforts by sending decks to more investors at once.
Along with year-over-year increases, links created in Q2 were substantially higher than Q1 — 6.52 versus 6.31, a 3% quarter-over-quarter increase.
Investors Aren't Wasting Any Time
Additionally, the average time investors spent reviewing decks was down 10% quarter-over-quarter in Q2 of 2020. This means that when investors chose to review a deck, they spent less time scrutinizing the information and made their decisions to meet with founders one-on-one more quickly. Also, this may be a side-effect of investors tending to more easily agree to virtual meetings with founders versus face-to-face meetings.
"While a lot of VC attention in Q1 was focused on existing portfolio companies, and is therefore reflected in a drop in new Q2 deals and funding amounts, investors have spent their time in Q2 searching for new opportunities," said Heddleston. "We expect this activity from Q2 to translate into more deals during the second half of the year, taking into account the fact that virtual meetings will likely extend the deal cycle."
DocSend will be releasing quarterly reports via the 2020 DocSend Startup Index to continue to track the investment landscape to better inform startup founders as the business and venture capital environment continues to change.
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 12,000 customers of all sizes use DocSend today. Learn more at docsend.com.
104 West for DocSend