

Investors don’t look at pitch decks for very long - replicatorblog
http://techcrunch.com/2015/06/08/lessons-from-a-study-of-perfect-pitch-decks-vcs-spend-an-average-of-3-minutes-44-seconds-on-them/#.fmsjk4:mTM4

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sago
I guess then I'm not the only one to think the interpretation of the data in
these slides is consistently poor.

e.g. The slide with the correlation scatter plots - who devised the model to
draw those trend lines? That's just awful statistics.

e.g.2. The slide that judges the important pages in the deck based on the
length of time they're looked at (important? why? why not 'complex' or
'difficult to grok'?)

e.g.3. Observed slide order actually says 'team is never in the middle', but
then averages the team to be in the middle of the deck.

Hmmm. What an awful piece of data analysis on potentially interesting data.

~~~
beat
Zero is an even number.

Two is an even number.

The average of two even numbers is an even number.

Therefore, one is an even number.

~~~
EliRivers
_The average of two even numbers is an even number_

In which universe is that true?

~~~
beat
It isn't. That's the point. Fallacy in the middle of the argument.

~~~
EliRivers
At risk of outing myself as massively non hipster, I truly don't see the
point. Stating obviously incorrect statements. What's the point of this game?
If you're trying to suggest that the original poster made a mistake, grow up
and just say so. Sometimes, there is a benefit to demonstrating a point
obliquely, when doing so causes people to think about things in a new way and
thus reach a burst of enlightenment. That's not the case here. This is just
smug hipsterness.

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ar7hur
Remembering pg's great advice before demo day, a pitch has only 2 goals:

\- Capture the investors' attention -- they'll have to remember your company
among dozens

\- Make them curious to hear more -- you want them to reach out and ask for a
meeting

None of these requires a big number of slides, or for that matter, time to go
through the pitch. Most entrepreneur do a simple mistake and try to put
everything that's relevant to their project in the pitch.

~~~
morgante
Many of these decks are actually used for step 2—after investors have heard
the initial pitch and are now interested in learning more.

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malanj
Average time could be very misleading here. I would assume that it's a bimodal
distribution (or something similar), with many decks that get almost no time
and some that get a lot of time.

So assuming a VC will spend ~4 minutes on your deck would be a bad idea.
They'll probably either toss it out more quickly than that or take a decent
amount of time to go through it properly.

~~~
jules
A natural distribution in this case is the exponential distribution. In the
first minute 80% gets thrown out. In the second minute 80% of the remainder
gets thrown out, etc.

~~~
marcosdumay
A bimodal distribution is way more likely. People just do not behave in free
of context ways.

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ftio
The bit about financials slides mattering most because investors spend more
time reading them seems misleading, especially in light of the evidence that
"only 57 percent of successful decks have this section."

Investors spend more time on financials slides because they're information
dense (there's literally just more to read), because they often receive less
design consideration than the "softer" slides (slap a table on there because
it looks like something an accountant would make), and because they're
calculating runway and evaluating business-savvy — not because they
necessarily "matter more," whatever that even means.

~~~
pcrh
I suspect it also has to do with traditions in finance. Due diligence, audits
of accounts, etc, are a integral part of how education in finance is
conducted. Also, it is easy to do the basic arithmetic and see if proposals
"add up". So people are more used to examining financial documents in detail.

When it comes to markets, people, sales, etc, people are more used to going
with their "domain knowledge" or "gut instinct", which takes only a few
seconds.

~~~
reagency
IOW they bikeshed the financials.

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eterm
I'd like to see those graphs redrawn with the outlier who contacted 300
investors removed.

~~~
erikb
The four outliers on the two y-axises could be excluded as well.

~~~
pcrh
Simply removing "outliers" just because you don't like them isn't a rigorous
approach.

~~~
erikb
But maybe lying outside of the range of the others might be a good reason? I'm
no expert. Just a guess.

~~~
pcrh
Do you actually know what the "true" range is?

The data presented is a sample, the "true" distribution might be different
from what is shown, and if you start 'cleaning" the data based on subjective
judgements, you might never discover the true range.

~~~
erikb
The thing is that the three dots that lay "outside the range were the other
dots are" (not the "true" range which we of course don't know) have a higher
impact on the conclusion than the amount of them justifies. That's why taking
them out should not harm but help. This is not the same as taking datasets out
of a medical study because they got sick by the new medicine. E.g., if you
look at the left diagram. The upward swing in the red curve is probably the
result of all the left points (199 points). But the downward trend is as far
as I can see the result of 1 point on the right. So can we trust that downward
trend as much as the upward trend? Probably not. Additionally removing the two
dots at the 150 meetings point might result in the curve not having such a
strong incline, but one that is backed by 196 points.

I really don't have more than basic education in statistics, but to me it
looks like a slight but constant upward trend until 100 investors contacted
and after that we simply don't have enough data. If you think about what the
diagram talks about getting a constant upward line or even more likely a
square root shaped line is very likely. Getting a bell curve is unlikely, just
from thinking about the topic. What should happen that contacting more than X
investors would result in less meetings?

In the second diagram removing the two dots at $4.5m and the two dots above
200 investors met leaves us with 196 data points that show a fairly equal
spread and that the amount of investors contacted might not influence that
much how much money you get in the end. That's also good because it's expected
to find that company evaluation depends on company value (customers, market,
team, etc) and not on how many investors you contact.

You make the data more conclusive by removing data points that have a big
impact on your results without the backup of other data points. That's what
handling outliers is.

~~~
pcrh
As to the investors contacted vs meetings plot, the red line is evidently
bogus. It is likely caused by trying to fit the data to some polynomial for
which there is no a priori justification. A straight-line fit would look more
reasonable and also be less affected by one "outlier" who contacted 300
investors.

I would agree that cutting-off curve fitting at 100-150 investors would look
prettier; the thing to do in that case would be either to not attempt to fit a
curve and just show the data, or alternately to fit only the earlier part (so
the red line stops half-way across the x-axis), but show all the data.

The only reason for doing a curve fit on this kind of data is to show that the
data fit some prior model, showing that the model is likely correct, or to
show where some statistical value lies.

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coherentpony
"DocSend, a startup that provides people with a secure and private way of
sharing files like offer letters or legal agreements, studied more than 200
pitchdecks ..."

If it's private, how were they able to study them?

~~~
chaselee
Companies opted in. It's on slide 2 of their findings ->
[https://docsend.com/view/p8jxsqr](https://docsend.com/view/p8jxsqr).

~~~
coherentpony
Oh I missed that! Thank you.

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erikb
Does anybody see how the red lines in the "Strive for Quality, not Quantity"
diagrams were generated? Looking at the data I don't get the impression that
either one looks like it follows the data. Both lines seem to be as good as
the other one in either diagram. I'm no expert but from having so many dots on
the left sides and nearly none on the right sides I'd say the data is
inconclusive. What do the data analysts say?

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ddebernardy
This says mountains on the importance of good titles.

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ActVen
This is why we used an legal-sized PDF infographic for our initial pitch
document. We only raised 400K...but the round was full in 20 days.

~~~
pedalpete
I was thinking of just this for our 'send around' deck, and then if we were
doing an actual in person pitch, then to use a pitch-deck.

Any chance you can share your infographic? I'd like to see how it wasy laid
out.

