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This week's Startup Index Newsletter is focused on how the Pitch Deck Interest metrics we recorded last week performed during the US elections and how the startup fundraising market could react. We're also sharing the elections scenarios Russ Heddleston, CEO of DocSend, explained in an interview with Biz Carson, report at Protocol. For founders and investors that have participated in fundraising during 2020, you can help with our research by filling out our survey linked below.

What could happen to startup fundraising?

Two weeks before the election, DocSend’s CEO, Russ Heddleston, spoke with Biz Carson, reporter for Protocol, to share his three scenarios for how the startup fundraising market would react depending on the Presidential election results. Below are his three scenarios, as published in Protocol's Pipeline.

As of Saturday, November 7th, it has been projected that Joe Biden is the President-elect and Kamala Harris is the Vice President-elect, so election scenario #3 would be our anticipated likely outcome for startup fundraising going forward.

Election scenario #1: It's a contested election and we don't know the results.

• Likely outcome: It's "pencils down" for a while, Heddleston said.
• Any controversy or uncertainty around the election will likely be a major shock to the system, similar to what happened at the start of the pandemic. "Founders weren't sending decks, investors weren't looking at decks. No one was doing anything," he said. He expects similar behavior until the election is resolved.
• The uncertainty around the uncertainty is likely why DocSend is already seeing that "oh no" spike in fundraising to get out ahead of it. "As a founder, if I am cash out in February, I should probably raise now, or even if I was cash out next summer, I might want to raise now in case there's uncertainty," Heddleston said.
• But if you're a founder whose business could be affected by Trump or Biden policy decisions, you may already be out of luck trying to raise. "If you're a company where the outcome of the election is going to be a big factor in you being successful or not, you're already not in a spot where you're investable," he said.

Election scenario #2: Trump is reelected and there's no administration change.

• Likely outcome: Fundraising follows a normal pattern in 2021, including a typical peak in March at the end of Q1.
• Four more years of Trump will likely not cause as much of a disruption to the funding landscape. Normally, there's a rush at the end of the year to close deals, although it may be less of a jump since there's already been a lift in funding deals, Heddleston said.
• March tends to be when the next wave of funding comes in, although Heddleston said investors engage a lot with pitch decks in January and February when things are slower.

Election scenario #3: Biden wins and there's an administration change.

• Likely outcome: It follows the pattern DocSend saw after the 2016 election where it slows way down and takes much longer into 2021 to recover, skipping the rise in March.
• "What we saw in 2016 was there was a big drop-off in fundraising after," Heddleston said. "In Q4 2016, the numbers went way down, and they stayed way down. It just did not recover in the beginning of the year."
• Instead of the boost in March, funding activity on DocSend at the start of 2017 remained depressed and ramped up later in the year, Heddleston said. So if there's an administration change, he believes there could be a repeat where there's a slowdown during the change of power and things start gaining momentum when it feels more stable again.

Pitch Deck Metrics Update: Election Week Data

Last week was an important one for US elections and it was up in the air as to how the fundraising marketplace would perform. DocSend’s CEO, Russ Heddleston, shares how the Pitch Deck Interest metrics performed throughout the week, as quoted in Protocol’s Pipeline newsletter. “On Monday and Tuesday, pitch deck interest fell fractionally, and on Wednesday we saw a big dip likely fueled by election uncertainty,” he said. With the full week’s results in, let’s dig into what happened.

Overall Pitch Deck Interest, surprisingly, leveled out by the end of the week to remain the same as the previous week. Investor interest does remain high for the year and is 23.49% higher than the same week in 2019. The average time spent by investors reading pitch decks went up by 6 seconds or 2.92% to 2.52 minutes. An increase in time spent means that investors took more time reading pitch decks.

The big spike we recorded last week was a 16.07% jump in the number of links each founder created, overall. This was the second-highest number of founder links created we’ve recorded in 2020. (tweet this) We think this spike can be read in a couple of ways. The drop in founder links created you see Wednesday, November 4th could be a signal that founders had uncertainty as the results were coming in. With the uncertainty of the elections results by November 5th, we can see that founders were sending their pitch decks at a much higher rate and this could be read as founders "getting their pitch decks in while they can" or optimism that the fundraising market would be vibrant based on the election outcomes. The Pitch Deck Interest metrics we record this week will be telling of the outlook both investors and founders have for the fundraising market now that US election results are in. We'll update the data on Monday morning, so make sure to revisit the Pitch Deck Interest metrics page then.

Participate in DocSend Fundraising Research

If you've enjoyed all of our research this year, you can be part of the next round by participating in this year's fundraising survey. Founders and investors from anywhere can submit their responses. All data is aggregated and anonymized.

Recommended Reads

How to Navigate Your Business Through an Evolving and Unpredictable Future

The problem with planning right now is that there is so much uncertainty. Alisa Cohn, an Executive Coach, offers some tools to use to navigate your business through an evolving and unpredictable future.

Read the full post on OpenView's blog.

On the power of audience and community with Sahil Lavingia

Sahil Lavingia, founder of Gumroad and early-stage investor, spoke with Romeen Sheth of Square One about how to leverage community and audience. 

Listen to the podcast on Anchor.

Using DocSend to Raise Your Next Round Faster

Join Russ Heddleston, CEO, DocSend, and Mark Goldstein, Chairman, UCSF Health Hub, and Partner, Builders VC, as they share their insights on what it takes to create a winning pitch deck for digital health startups, and how to use the latest features by DocSend to raise billions in the midst of a pandemic.

When: Wednesday, November 18, 2020, 3:00 PM – 4:00 PM PT