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This week's Startup Index Newsletter highlights data from our first ever VC fundraising report "Looking behind the curtain: How VCs raise their early funds". As subscribers, you are among the first group to see this exclusive data, so make sure to dig in. Also, we're featuring the newest episode of Funded, Russ Heddleston discussing 2020 fundraising trends on the Friends & Family Round podcast, and last week's Pitch Deck Interest metrics update.

Digging into the shifting landscape of VC fundraising

Surveying nearly 50 firms, our data shows that venture capitalists raising capital for their early funds has similarities to startups raising their early rounds. For all VCs, simply contacting more Limited Partners and seeking more meetings doesn't equal raising more capital. Our data suggests that both early-stage VCs and startup founders can raise very efficiently by telling compelling stories and clearly presenting differentiated strategies for outcomes after fundraising. This is the same strategy that VCs would recommend to the startup founders they're partnering with, so it's crucial for VCs to keep in mind that this advice also applies to their fundraising efforts.

The VC fundraising landscape has changed significantly in the past several years. Once accessible only to a select number of well-connected investors, the world of venture capital has been democratized, with more funds springing up ever than before. With much lower costs involved in operating and raising money for new funds, many of the hurdles that new VCs once faced are now much less burdensome.

In this shifting landscape, it's more important than ever for VCs to stay on top of trends and understand what the fundraising process looks like today. For the first time, we are helping demystify early-stage VC fundraising with data from the DocSend Startup Index. This unique data set illuminates how dozens of VC funds were able to successfully raise at a time of intense competition. It also sheds light on how VCs used the DocSend platform to connect with LPs and raise their funds. 

For startup founders, this report reveals the previously opaque process of how venture capitalists raise capital from Limited Partners. 

The Fundraising Timeline: Patience Required

What kind of time commitment does the fundraising process require for VCs? For first funds especially, our analysis shows that the process can take many weeks.

Data you can find in our new VC fundraising report:

• Why contacting more Limited Partners doesn't always yield more meetings
• Why more Limited Partner meetings doesn't equal raising more money
• The amount of funds VCs raise compared to active weeks spent fundraising
• The importance of anchor Limited Partners for early funds
• The average amount the anchor Limited Partner allocated in first-time funds
• How early-stage VCs used DocSend during their fundraise
• The fundraising efficiency rates of all-female, mixed gender, and minority VCs
• The makeup of the average funds that responded to our survey
• The geography of Limited Partners investing in new funds

Pitch Deck Interest Metrics Update

Last week, the VC Deck Interactions Pitch Deck Interest metric jumped 17.75%, which is 40.14% higher than the same 2020. Time Spent reading per deck is up by 1.4% (an avg. of 2.54 mins per deck) and Founder Links Created increased by 19.49%. So far, in January, startup fundraising activity is high. (retweet our tweet)

Read our analysis of last week's fundraising marketplace activity.

Recommended Insights

Russ chats with Jason Yeh on the Friends & Family Round pod 

Russ Heddleston, CEO of DocSend, gives us a very unique view into 2020 fundraising trends based on our Pitch Deck Interest metrics in a conversation with Jason Yeh on the Friends & Family Round episode of the Funded podcast.

Listen to this insightful episode on Spotify, Apple Podcasts, or search "Funded".

Unpacking 5 of Atlassian’s Most Unconventional Company-Building Moves

Former Atlassian President Jay Simons dives into why the company relied on product-led growth before anyone coined the phrase, his theory on why HipChat lost to Slack, and the flywheels that fuel and reinforce the company’s up-and-to-the-right growth.

Read it on First Round Review.

Listen to the latest episode of the Funded podcast!

In this second half of the 2-part series Funded podcast interview with Sam Corcos, co-founder and CEO of Levels, Sam begins by sharing details around a large key to his success - his very large cap table. Afterwards, we discuss specifics around his approach to attracting a $12MM seed round led by Andreessen Horowitz and how newcomers to the sport of fundraising might fare employing similar tactics.

Subscribe to Funded on Apple Podcasts, Spotify, or search "Funded"