The Growth Story
Show the system behind your goals Today, we\u2019ll talk about establishing a growth story for your startup Investors fund deals based on the team, the market, or the technology.\xa0 While these are popular investment thesis, the investment decision often comes down to what I call \u201cthe Growth Story\u201d.\xa0\xa0 This is your operational revenue model showing how you acquire customers and how much they pay for your product/service. If you have substantial revenue say a $1M then the investor assumes you have a growth story.\xa0 Growth stage investors will look at the model to see how much you can grow that business and what constraints you will face and when. For pre-revenue or low revenue companies you can sho\xa0 in unit economic numbers the proven repeatable business model you have up and running.\xa0 If you haven\u2019t done so already then take $5K and prove out the unit economic model. For example, let\u2019s say -You can generate leads for $1/lead from Facebook ads -Through a followup email you\xa0 can convert 1 out of 50 leads into a paying customer -Each paying customer buys on average $250 worth of product\xa0 -You can take these numbers and render a basic economic unit model as follows: CAC: $50 LTV: $250 CAC: LTV is 1:5 -You then add the time it takes for signup and fulfillment and you have a unit economic model.\xa0 The fact you know your numbers will impress investors.\xa0 Investors look for the system behind the goals.\xa0 This is one way to demonstrate your growth story. Thank you for joining us for the Startup Espresso where we help startups and investors connect for funding. Let\u2019s go startup something today!