Showcasing True Traction: A Founder's Guide to Winning Investment

To an investor, a great idea is just the starting point. What truly captures their attention is tangible proof that your business is gaining momentum. This evidence, or "traction," demonstrates that your product isn't just a concept but is solving a real-world problem for real people.

The most powerful thing you can bring into a pitch is a solid business that's already working. This means building a minimum viable product (MVP) and securing early users or customers before you even begin to look for funding. Awards and media coverage are certainly nice, but they don't pay the bills. The real traction that matters is what you can measure in numbers, from revenue to user adoption.

‍

Understanding Your Traction Metrics

Traction can take many forms, and the most compelling examples are those tailored to your specific business model.

• User Growth: A fundamental metric is a steady increase in monthly active users (MAU) or daily active users (DAU). It's not just about the final number, but about the growth rate—a rapid, accelerating growth curve is very attractive to investors.
• Engagement: A large user base is great, but are they actually using your product? Metrics like session duration, features used, or retention rates (e.g., how many users return after a week or a month) prove that your product is valuable and sticky. For purpose-driven projects, this also includes high attendance at community workshops or positive feedback from surveys.
• Revenue and Sales: The most direct form of traction is monetary. This includes a clear breakdown of your sales pipeline, recurring revenue, and customer lifetime value (CLV). A growing list of paying clients is a powerful indicator of product-market fit.
• Viral Loops: Some products are so good they spread organically. This can be demonstrated by a low customer acquisition cost (CAC) and a high K-factor, which shows that existing users are effectively bringing in new ones. The K-factor is a term used in viral marketing to describe the growth rate of websites, apps, or a customer base.
• Impact Metrics & Partnerships: For projects with a social mission, investors want to see quantifiable impact. This could be measured in tonnes of carbon emissions saved or the number of children who have increased their reading scores. Successfully completing a pilot programme or securing a partnership with a non-profit or government body provides crucial external validation.

‍

True Traction

Traction is ultimately about proving your business model works. While grants are a good starting point, they are not a sustainable business model. The real question is: how does your business "wash its face" with continued revenue? That's true traction. Your focus should be on building a company that is so useful, so needed, that it can support itself. That's the business investors are looking to fund.

‍