How to have a successful pre-seed fundraising round in 2020

There’s a lot to consider when raising money for your startup—especially if you’re in a pre-seed fundraising round. You’re in the early days of your company, so there’s not a lot of traction to share, so how do you prove you’re worthy of funding? The secret is in your pitch deck.

This week, DocSend’s CEO, Russ Heddleston, spoke at Startup Grind to go over how you can better leverage your pitch deck to be more successful in your pre-seed fundraising round. His talk was based on new key insights thousands of pitch decks, specifically from pre-seed founders who opted into our 2020 research, which we are releasing later this month. Here are some of the main takeaways from that research.

Keep it short

The average pre-seed pitch deck was viewed for 3 minutes and 21 seconds. That isn’t a lot of time when you consider how much information you need to convey to potential investors in your pitch deck, and most companies do it in about 20 slides. But nonetheless, the key is to keep it concise. For example, the average pre-seed deck only spent about one slide on the company purpose. Chances are, you’re inclined to say a lot more about this—don’t. Think of your pitch deck as an exercise in being succinct and only conveying information that is the most relevant and valuable. And remember that a VC spending more time on your deck is not necessarily a good thing. It could mean they are particularly interested, but it is actually more likely that they are trying to understand something that could have been shown more clearly.

It takes time

Fundraising really does take months. If you aren’t successful in the first few weeks, that is normal—the average successful pre-seed round took 16 weeks to close. In these situations, the average number of investors contacted was 54, and about half of those resulted in meetings. The average time for a successful pre-seed fundraising round is about a month longer than we found in our previous research, which may be due to the fact that pre-seed companies tend to be light on financials and tangible traction. So if that’s the case for you, don’t despair—if you’re not seeing any success in your round, you probably don’t need to go back to the drawing board until it’s been about four months.

Choose your VC intros wisely

Don’t waste your time on VCs who you suspect won’t be a good fit for your company. Yeah, you need money, but you’re ideally in it for the long haul with your pre-seed investors, so make sure that not only are you comfortable with their level of expertise in your field, but also their ability to be a resource to you. You should also genuinely like them, because you’re going to spend a lot of time together. So resist the urge to even meet an investor that you know won’t be a good fit. One way to help avoid this is to focus on getting warm intros from contacts you trust—this will increase your chances of being successful anyway. If you focus on getting 40-50 quality intros, you’ll reduce the amount of work and outreach you need to do. If you need more within four months or so, that’s fine, but go for quality over quantity.

Put in the work

Overall, remember that your pitch deck is what will get you that first meeting or not, so be critical. (If you want to find out specifically how you can improve your pitch deck, click here.) Make sure your team slide looks great. You should know what you want to say and be prepared for the questions that might come your way (and don’t invite any in your pitch deck that you aren’t willing or prepared to answer). Don’t just memorize your pitch. Know your product and your business, and remember that a meeting with a potential investor should be a conversation to see not only if you are a good fit for their portfolio, but also if they are the right one to help you continue the growth of your business.

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