A new report from DocSend Inc., a Dropbox Inc. company, finds a widening gap between founder and investor activity amid the ongoing downturn in the venture capital funding industry.

The downturn in venture capital funding has been well-documented. Just last week, a report from Crunchbase Inc. detailed that VC funding fell 49% in the second quarter year-over-year, a trend that started in the middle of last year. Not as well-documented has been pitch activity: how many startup founders are putting together pitch decks to raise funding for their startups and what the response rate is.

DocSend’s mid-year 2023 Pitch Deck Interest metrics analysis has identified a widening gap between founder and investor activity in the startup fundraising landscape. The study found that while there was an increase in the number of pitch decks sent out by founders in the second quarter, investor engagement with these proposals has decreased. The report says that signals a growing struggle for founders in their fundraising efforts.

The report found a 4% year-over-year increase in pitch decks sent by founders in the second quarter but a decrease in investor engagement with these decks, both quarter-over-quarter and year-over-year, by roughly the same amount. The growing gap suggests a trend of increased selectivity and diligence among investors, which places them in a favorable position in the deal-making process, DocSend says.

Seasonality was also identified as impacting the early-stage fundraising market, with activity typically slowing during the northern summer and other holiday periods. DocSend’s metrics show that investor time spent reviewing pitch decks fell by 4% quarter-over-quarter and 7.7% year-over-year and year-to-date, indicating that founders have less time than ever to attract potential investors’ attention.

Comparing the figures with 2021, the gap is wider yet. Founder activity rose 15.9% in the second quarter of 2022 from the same time in 2021, but the investor pace slowed by 11.5% over the same time period.

“All three of DocSend’s historical metrics point clearly to an investor-friendly marketplace at this time,” said Justin Izzo, data and trends analyst at Dropbox DocSend. “Due to continued macro concerns as well as the usual seasonal lull, fundraising dollars may be challenging for fundraising founders to come across in the near future.”

Although the report dwells on the negative aspects of the broader downturn in the VC industry, it does note that despite the discouraging fundraising numbers, investors continue to review pitch decks, albeit at a slower pace than capital invested.

Image: Bing Image Creator