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Hi John,

This week's newsletter features seven pre-seed fundraising stats that founders and investors should know, based on our new research, along with helpful insights on storytelling around your product story, business model story, and company purpose. We also share the latest startup fundraising marketplace trends, why emerging fund managers should take a page from founder pitch decks, and how founders can save on useful fundraising tools with Dropbox for Startups.

The pre-seed round in 2021–22

The fundraising climate has changed significantly within the last few years. To help founders realize successful pre-seed rounds in 2022, DocSend surveyed 320 startups that identified themselves as pre-seed stage companies. Here's Justin Izzo's synopsis:

If 2022 has given you some whiplash as a founder, you’re not alone.

This year’s fundraising climate couldn’t be more different from last year’s. 2022 numbers indicate that VC funding has dropped, but that doesn’t mean investors aren’t still looking for early-stage deals.

So what does this mean for pre-seed founders? It means they can still see a successful seed round, even if the road to get there isn’t as smooth as it once was.

To help founders realize successful pre-seed rounds in 2022, DocSend surveyed 320 startups that identified themselves as pre-seed stage companies. Our goal? To analyze their pitch decks and see how they performed throughout 2021 compared to the first half of 2022.

The resulting report, “Adapting the pitch deck for a new market,” is a playbook full of insights, stats, and actionable advice for how to put together a successful pitch deck when fundraising overall is taking a hit.

Download the full report here, but keep reading for the highlights. TL;DR: Succinct storytelling is how you win in 2022.

7 pre-seed stats you need to know

1. VC engagement with pitch decks has fallen 23% in 2022 compared to 2021. At the same time, founders are sending 30% more pitch decks in 2022.

2. VCs are spending 25% more time on pre-seed decks that go on to receive funding versus those that don’t.

3. Traction is a “make or break” factor for unsuccessful pitch decks.Among companies that didn’t receive funding, VCs spent 41% more time on this section in 2022 compared to 2021. This was the most-scrutinized section for unsuccessful companies.

4. VCs care about your company’s purpose more than ever — this slide was the third-most scrutinized section in 2022, whereas it used to be much further down the priority list.

5. It’s taking longer to raise a pre-seed round. In 2021, startups raised their pre-seed round in 13.5 weeks, whereas in 2022 it’s taking them 15 weeks. Only 25% of successful startups are completing their fundraises in six weeks in 2022, compared to 36% in 2021.

6. In 2022, founders are having 33% more meetings for their pre-seed rounds compared to 2021.

7. More than 70% of successful decks had a competition section, whereas only 35% of unsuccessful decks had one.

For more detailed pitch deck stats, see our Startup Fundraising Pitch Deck Metrics.

What the stats mean: Pitch decks need Goldilocks storytelling

VCs may be spending less time on pitch decks overall, but they’re laser-focused on the following sections:

• Product
• Business model
• Company purpose

Overall, investors spend less time scrutinizing decks than ever before. Going forward, founders need to be as succinct as possible while communicating just enough detail to entice VCs to take a meeting.

It’s a question of balance: aim for maximum readability with minimal effort, but don’t include so little information that the slide has no impact. Each slide should have a maximum of 50 words, with eye-catching graphics, section headings, and page numbers. These small details will give investors easy reference points when they follow up with you.

Watch this tutorial on pitch deck construction for high-level tips on storytelling:

Read the full post that includes:

• How to shape your product story (with an example)
• How to shape your business model story (with an example)
• Pre-seed product slide example: AirBnB
• How to shape your company purpose story
• And more here 

Pitch Deck Interest Metrics Update

Founders and investors moved in opposite directions last week in the startup fundraising marketplace. VC activity jumped 4.05%, founder activity went down by 13.13%, and VC time spent increased by 4%.

Here's the full analysis of last week's activity.

Recommended Reads

Why emerging fund managers should take a page (or three) from founder pitch decks

Max Fleitmann, founding partner of Wizard Ventures, shares his thoughts on how to build a more compelling, convincing narrative with these three components commonly used in startup pitch decks.

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Move Fast or Die: Key Startup Lessons

Aditya Agarwal, investor at South Park Commons, says most common question I get from CEOs at early-stage companies is how to move and ship products faster and he's shared his insights on how Facebook, Dropbox, and SPC focused on speed.

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Your Guide to a PLG Series A

Kyle Poyar, head of Partner expansion at OpenView, believes it’s time to stop judging product-led companies by the same old SaaS metrics. He breaks down what Series A investors are looking for when fundraising in this blog post:

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End-to-end fundraising tools for founders