Business
Why Now?: Successful Founders Display Urgency Among Market Competition in DocSend's Annual Seed Report
Fundraising cycles grow longer while investors plow through pitch decks SAN FRANCISCO, Dec. 7, 2023 /PRNewswire/ -- Dropbox DocSend, a secure document sharing
About this update from Dropbox, Inc.
[{"type":"text","content":"Fundraising cycles grow longer while investors plow through pitch decks\nSAN FRANCISCO, Dec. 7, 2023 /PRNewswire/ -- Dropbox DocSend, a secure document sharing platform and part of Dropbox (NASDAQ: DBX), today released data revealing that investors spent an increased amount of time on the competition and \"why now?\" sections of seed decks despite spending 20% less time reviewing pitch decks year-over-year (YoY). Investors are scrutinizing key differentiators in a crowded yet disruptive marketplace while founders attempt to demonstrate definitive success metrics and need for urgency.\n\n \n \n \n \n \n \n\n \nIn its annual report, The seed round in 2022-23: No time like the present? VCs, founders focus on \"why now?\" amid ongoing slowdown, DocSend analyzed 170 seed startup pitch decks to gather insights on successful and unsuccessful pitch deck composition. Through the analysis, DocSend is able to better understand the nuances of current investor behavior in the last half of 2022 and first half of 2023.\nSeed funding was down 27% YoY in Q3 2023, despite optimism about disruptive technology like artificial intelligence (AI). This sustained downturn in funding signals the seed stage is losing its resilience as market conditions worsen. To succeed in an investors' market, seed stage founders need to portray why now is the time to invest for long-term success against competitors.\nThe Importance of Now, and Later\nFounders need to clearly communicate why their company is a good investment right now, even in a tough market, with a 65% increase in VC time spent reviewing the \"Why Now?\" section of pitch decks.\nWhile founders need to demonstrate the short-term importance of an investment, they are expected to simultaneously display a solid path to success and profitability for the long-term. A strong product and business model slide should be polished and easy to digest, with review times on these deck sections dropping by 10% and 2%, respectively.\n\"Investors found comfort in the uncomfortable market and don't mind saying 'no' to deals,\" said Justin Izzo, senior research and data lead at Dropbox DocSend. \"In order for seed-stage founders to succeed today, they need to clearly communicate two timelines: their product in the current market and its longevity. Founders need to communicate a sense of urgency with a compelling 'why'.\...