Traction vs. Momentum
Many investors look for traction in a startup to gauge their progress. Traction stated as a single number on a pitch deck can be hard to judge as sufficient for an investment. Many investors tell the startup \u201cnice traction, but we\u2019d like to see more.\u201d Instead of traction look for momentum. Momentum demonstrates things are continuing to progress and move forward. Sales, team, product, fundraise are the core four to look at. Investors look at these four because they represent the results of the startup\u2019s work and not that of the market\u2019s progression. Momentum must be shown over time in numerous updates by email, phone, or in person. It takes four touches before an investor gets a sense that there is momentum and it will continue. Startups should always have some engagement with customers ongoing- such as alpha testing, beta customers, MVP customers, etc so as to have something to talk about with investors. For startups pursuing the enterprise sale show your momentum through the sales funnel with your large customers. It typically follows the model of interest, qualification, trial negotiations, pilot test, full product launch, ongoing support. Show how prospects are moving through the funnel and customers are upgrading and expanding seats. It\u2019s the continuing forward progression that counts. Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding. Let\u2019s go startup something today!