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As many of you readers know, we track fundraising market activity on a weekly basis with our Pitch Deck Interest metrics. In today's newsletter, we wanted to dig deeper into data we collected over Q4 and share our expectations for Q1 activity.

Q4 2020 Pitch Deck Interest Metrics Review 

Key Leading Indicators of VC Fundraising Activity

Through our platform, we are continually measuring the level of engagement between founders and venture capital investors that are reviewing pitch decks from startups around the world. We gauge the fundraising landscape by tracking the frequency with which potential investors are reviewing pitch decks, how long they're spending reading those decks, and how many pitch decks founders are sending out to investors. The Pitch Deck Interest metrics, updated weekly, are a leading indicator of future deal flow and fundings.

After a shift in how fundraising was conducted, 2020 was a game-changer

"This is the first time, in one of the most active fundraising years ever, that DocSend has released a full year of metrics tracking week-by-week pitch deck interest and engagement," said Russ Heddleston, co-founder and CEO of DocSend. "As we look back on 2020 our data tells the story of how VCs and founders navigated a historic and unpredictable fundraising year. Even with the pandemic, economic crisis, and the majority of the fundraising process going virtual, both investors and startups turned 2020 into one of the most successful and productive years yet."

Investor Deck Interactions 

In early October, venture capital investor interest and engagement in startup pitch decks reached an all-time high. And across the span of 2020 investor interaction increased by 21% compared to 2019.

Underscoring how volatile the fundraising landscape was this past year, pitch deck interaction spanned the highs and lows of the year with a 54% spread. The lowest point of VC interaction occurred in early March, just after the pandemic took hold, bringing fundraising to a near standstill, while the highest point of interaction was in October, eclipsing the demand of previous years.

Founder Links Created

In a period that traditionally sees a slow-down in fundraising activity, startup founders were active in Q4 and across the year in terms of creating and sharing links for their pitch decks. The number of links created in Q4 was 14% higher than in Q4 2019 and reached its highest peak of the quarter during the week of the election. This late-year increase in funding asks could portend similar activity in Q1 2021.

A consistent level of activity was evidenced across all of 2020, with founders creating pitch deck links at a rate 14% higher than the previous year. Founders scrambled for funding in early March, with pitch deck links increasing by 37% from the previous week. This kicked off a spree of fundraising activity as founders rushed to raise capital in the face of economic uncertainty brought on by the then-impending pandemic.

Investor Time Spent Reading

Throughout 2020, investors were spending significantly less time reviewing decks than in 2019. In Q4 2020, the time investors spent reviewing pitch decks was 15.5% lower than in Q4 2019 and was down 12% year-over-year.

Time spent on pitch decks is traditionally lower when there is increased fundraising activity. Savvy VCs simply don't have time to dive deeply into decks and are more likely to quickly scan decks to identify key startup attributes. More than ever, a crisp narrative and informative deck are key for successful fundraising.

Expect to See Spur of Activity in Q1 2021

"Traditionally early Q1, especially following an election, is quieter in terms of investor activity for startups and founders. But with vaccine distribution ramping up and a new administration coming to the helm, I expect we'll see a superstorm of activity. Founders are eager to ramp up their businesses amongst the optimism of 2021," said Heddleston. "According to the U.S. Census Bureau, Americans in 2020 were starting businesses at the fastest rate in more than a decade. The surge of new businesses started during the pandemic will be eager to engage in their first significant round of funding."

"While we are in a new year, most of the country remains in some form of lockdown. The way fundraising is conducted in 2021 will be a mix of old and new. Once vaccinations become more widespread, in-person meetings and in-office gatherings will resume, but only to a degree. At this point, founders and VCs alike have gotten into a groove with remote networking and fundraising and will likely stick with what works for them," continued Heddleston.

In addition to the Pitch Deck Interest, we will continue releasing quarterly reports via the DocSend Startup Index to track the investment landscape through 2021 and beyond to better inform startup founders on the state of the fundraising market.

Recommended Reads

Russ's interview with Jason Calacanis on This Week in Startups

Russ Heddleston talks with Jason Calacanis, angel investor and entrepreneur, on his This Week in Startups podcast about building DocSend, pitch deck insights, leaning into criticism, successful user acquisition channels, and much more.

Watch the full episode on YouTube (includes link to podcast).

Drive Growth by Picking the Right Lane — A Customer Acquisition Playbook for Consumer Startups

 Dan Hockenmaier and Lenny Rachitsky share their framework for "picking your lane", walk you through three case studies of companies that became world-class at a lane, and then tackle some frequently asked questions about consumer startups.

Read the full post on First Round Review.

Silicon Valley Bank's Fundraising Workshop

What are investors actually looking at when they review a deck?

Russ Heddleston, CEO of DocSend, will share what investors are actually looking for when they view a seed stage deck, which sections are most important, and other behavioral data his team has gathered. During the event you'll have a chance to live chat and trade tips with your peers going through the fundraising process as well.

When: Friday, January 15, 2021, 11:00am - 12:00pm PST

Register on SVB's event page.