The DocSend Fundraising Scores are designed to provide clear signals on fundraising activity in the midst of pronounced and sometimes inconsistent market shifts.
Following 2021’s explosive year of fundraising, 2022 resembled a return to healthy and responsible investing practices, despite a somewhat “doom and gloom” portrayal. Increased investor due diligence, combined with economic uncertainties surrounding a potential recession, has ratcheted up the intensity for founders looking to raise capital. In 2023, while investors are sitting on “dry powder” as they search for the right investments, founders are searching for ways to interpret fluid market dynamics.
While data on the overall health and status of fundraising typically becomes available after the end of each business quarter, DocSend Fundraising Scores are a mid-quarter check-in to gauge activity relative to historical context to inform strategic startup fundraising efforts. Rather than a lagging indicator, like other post-quarter reports, these cohesive scores provide a real-time read on current fundraising activity between quarterly data.
Q1 2023 Scores:
Founders: +4 Investors: 0
At the mid-quarter mark of Q1 2023, founders scored a +4 and VCs scored a 0. VC activity is well aligned with average activity levels over the past 3 years, but founders are more active than their historical benchmarks. The discrepancy between these scores means VCs are likely to have their pick of pitch decks from eager founders, and founders may have to work harder to stand out from the crowd in the startup fundraising process.
How we get the score: Historical startup founder and investor activity, as well as quarterly data, contrasted year-over-year, quarter-over-quarter, and year-to-date is measured on a 21-point scale – with a “+10” representing the highest level of activity, a “-10” representing the lowest level of activity, and a “0” representing average activity over the last three years. The methodology of including multiple analyses of quarterly data gives each score factual depth, and together serves as a holistic view..
Startup Fundraising Score Methodology Cont.
DocSend’s Fundraising Scores measure quarterly VC and startup founder activity according to five weighted factors from our historical data:
- 3-year trailing average
- Previous year’s quarterly activity
- Previous quarter’s activity
- Year-to-date average for founders and VCs
- Year-to-date founder/VC activity relative to year-to-date VC/founder activity
To arrive at our scale of +/- 10 scores, we begin at 0 and add/subtract 0, 1, or 2 points based on how much quarterly activity exceeds or falls short of our five historical benchmarks. Our model weighs recent benchmarks more heavily.
DocSend’s Pitch Deck Interest metrics factor into each score, which provide weekly access to founder links created, investor deck interactions, and investor time spent. These metrics are defined as:
- Founder links created – the average number of pitch deck links each founder is creating via DocSend. This serves as a proxy for the supply of startups seeking funding. A “link” refers to the unique URL a founder creates using DocSend to share their pitch deck with investors. When the average number of links increases it means that founders are sending their decks out to more investors.
- Investor deck interactions – the average number of investor interactions for each pitch deck link. This serves as a proxy of investment demands. The higher the interaction metric, the more often decks are viewed, shared, and revisited by potential investors.
- Investor 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.
The DocSend Fundraising Scores will be updated every quarter at the mid-quarter mark, which will serve as a check-in on founder and investor activity.
Dive into our fundraising research