If 2022 has given you some whiplash as a founder, you’re not alone.
This year’s fundraising climate couldn’t be more different from last year’s. 2022 numbers indicate that VC funding has dropped, but that doesn’t mean investors aren’t still looking for early-stage deals.
So what does this mean for pre-seed founders? It means they can still see a successful seed round, even if the road to get there isn’t as smooth as it once was.
To help founders realize successful pre-seed rounds in 2022, DocSend surveyed 320 startups that identified themselves as pre-seed stage companies. Our goal? To analyze their pitch decks and see how they performed throughout 2021 compared to the first half of 2022.
The resulting report, “Adapting the pitch deck for a new market,” is a playbook full of insights, stats, and actionable advice for how to put together a successful pitch deck when fundraising overall is taking a hit.
Download the full report here, but keep reading for the highlights.
TL;DR: Succinct storytelling is how you win in 2022.
7 pre-seed stats you need to know
1. VC engagement with pitch decks has fallen 23% in 2022 compared to 2021. At the same time, founders are sending 30% more pitch decks in 2022.
2. VCs are spending 25% more time on pre-seed decks that go on to receive funding versus those that don’t.
3. Traction is a “make or break” factor for unsuccessful pitch decks.Among companies that didn’t receive funding, VCs spent 41% more time on this section in 2022 compared to 2021. This was the most-scrutinized section for unsuccessful companies
4. VCs care about your company’s purpose more than ever — this slide was the third-most scrutinized section in 2022, whereas it used to be much further down the priority list.
5. It’s taking longer to raise a pre-seed round. In 2021, startups raised their pre-seed round in 13.5 weeks, whereas in 2022 it’s taking them 15 weeks. Only 25% of successful startups are completing their fundraises in six weeks in 2022, compared to 36% in 2021.
6. In 2022, founders are having 33% more meetings for their pre-seed rounds compared to 2021.
7. More than 70% of successful decks had a competition section, whereas only 35% of unsuccessful decks had one.
For more detailed pitch deck stats, see our Startup Fundraising Pitch Deck Metrics.
What the stats mean: Pitch decks need Goldilocks storytelling
VCs may be spending less time on pitch decks overall, but they’re laser-focused on the following sections:
- 產品
- Business model
- Company purpose
Overall, investors spend less time scrutinizing decks than ever before. Going forward, founders need to be as succinct as possible while communicating just enough detail to entice VCs to take a meeting.
It’s a question of balance: aim for maximum readability with minimal effort, but don’t include so little information that the slide has no impact. Each slide should have a maximum of 50 words, with eye-catching graphics, section headings, and page numbers. These small details will give investors easy reference points when they follow up with you.
Watch this tutorial on pitch deck construction for high-level tips on storytelling:
How to shape your product story (with an example)
Unnecessary text kills product slides. In your product section, let your images, wireframes, or mockups do the talking.
For a concise product section, aim for at-a-glance readability about:
- What your product does
- What’s already built
- Feature pipeline/roadmap
If you don’t have a launched product, don’t worry so much: A significant minority (30%) of successful pre-seed companies managed to raise in 2021–22 without one. If you don’t yet have a launched product to show, you can still impress investors by integrating thorough product overviews into compelling stories about your vision and business model.
Pre-seed product slide example: Uber
It may not look like much now that we take it for granted, but slide 8 of Uber’s 2008 pre-seed pitch deck contained some magic words: “1-click request from geo-aware devices”.
The product section of Uber’s pitch deck accomplished three things:
- Demonstrated innovation in their category without getting into the weeds of how their product worked
- Specified how their product worked with existing technology (Google Maps)
- Told compelling mini-stories through use cases
How to shape your business model story (with an example)
In a challenging fundraising climate, VCs are expecting companies to look like fully-fledged businesses from the beginning. Pre-seed companies need to communicate a business model that’s repeatable, easy to understand, and memorable.
Like the product section, VCs in 2022 are spending less time reading the business model section – 42% less time in 2022 compared to 2021. Knowing this, pre-seed founders should pare down their monetization plans into a model that any non-specialist can understand.
Use graphics to communicate at-a-glance numbers about:
- Total available market
- Serviceable available market
- Fees/pricing
- Expected revenue
Pre-seed product slide example: AirBnB
In 2008, AirBnB was a pre-seed startup — they were also known as “AirBed&Breakfast” and this pitch deck helped them raise a $600,000 pre-seed round.
On slides 5 and 7, AirBnB connects market size and business model with minimalist slides that communicate raw numbers. Using an estimate of 15% of available market share, AirBnB was able to entice investors with “concrete” revenue projections that added an air of certainty to their deck.
How to shape your company purpose story
Your company purpose is a one to two sentence slide at the beginning of your deck, and it now carries a lot of weight. Investors are spending more time on this slide to determine whether they want to read through the rest of the deck.
Your company purpose is where balance is most important: You want to avoid complicated, grandiose vision statements, but you also want to inspire excitement.
For more pitch deck tips for 2022, on top of metrics for pre-seed gender, age, ethnicity, and geography, download the full “Adapting the pitch deck for a new market” playbook.
If you’re a founder looking for immediate insight into the performance of your pitch deck, start a free trial and see exactly how investors are engaging with your content.
