A new report from DocSend Inc., a Dropbox Inc. company, released today detailed new data pointing to a heightened risk aversion in pre-seed investing, with venture capital investors shifting priorities to long-term profitability over rapid growth.

The report, “From FOMO to JOMO: VCs shift from rapid growth to long-term risk aversion,” was based on an analysis of more than 200 pre-seed fundraising startups to understand successful and unsuccessful components of pitch decks and examine investor interactions in 2022 and the first half of 2023. The title is a reference to what the report says is a shift from years of investors’ “fear of missing out” on an investment to “joy of missing out.”

The headline takeaway from the report is that though investors are increasingly saying no to pre-seed deals, spending on average 11% less time from a year ago reviewing pitch decks, there is still the ability for successful founding teams to create shorter, narrative-first pitch decks that prove product opportunity and market preparedness.

The report shows that business model and traction remain the most important sections to investors, as they did in 2021, despite a completely different investment market in 2023. Investors were found to spend 48% more time on business models and 25% more on traction compared with other criteria used when assessing a pitch deck. Investors are placing emphasis on product readiness and financials to demonstrate attainable gains alongside long-term profitability.

For founders, the report highlights the need to demonstrate opportunity cost to cut through investor risk aversion with a compelling pitch deck that establishes a strong product narrative early on. Successful pre-seed founders were found to share a clear and concise business plan that de-risks their product and conveys financial longevity – identifying financial planning and communicating to investors the potential “cost of missing out” on funding their business opportunity.

Cutting through the noise with a targeted pitch deck is vital in 2023, as investors spent a record-low amount of time reviewing pitch decks. The time spent on reviewing pitch decks among investors has now dropped for the third year in a row, while at the same time, the number of incoming pitch decks rose by 16% year-over-year.

Brevity may be the soul of wit, but it’s also a better way to raise money, with successful pitch decks found to average 16 slides versus 19 in an unsuccessful deck. Amid heightened hesitancy, investors spent more time in a smaller review time window on slides that mapped out paths to revenue

“Although the startup ecosystem has fallen back into a buyers’ market, early-stage founders can find success with patience and a strong pitch deck,” said Justin Izzo, data and trends analyst at Dropbox DocSend. ”Conveying a strong vision and execution plan can leave risk-averse investors ready to take the leap. Investors are still eager to invest in the right opportunity and spend less time on follow-up reviews for successful pitch decks compared to unsuccessful decks. As investors look for long-term rewards, fundraising itself has become a long-term reward.”

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