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How can you demonstrate traction in your pitch?

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Traction is one of the most important factors that investors look for in a startup pitch. It shows that you have validated your problem, solution, and market, and that you have achieved some measurable results that indicate your potential for growth and profitability. But how can you demonstrate traction in your pitch, especially if you are in the early stages of your startup journey? In this article, we will share some tips and examples on how to showcase your traction in a compelling and credible way.

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Christian Tsanov

Founder & CEO

1 Define your traction metrics

The first step to demonstrate traction is to define what metrics you will use to measure your progress and success. Depending on your stage, industry, and business model, you may have different types of traction metrics, such as revenue, users, retention, engagement, growth rate, customer acquisition cost, lifetime value, and so on. You should choose the metrics that are most relevant and meaningful for your startup, and that align with your goals and milestones. You should also be able to explain how you track and calculate your metrics, and what assumptions and methods you use.

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Christian Tsanov

Founder & CEO
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Early on, it is critical to stick to the basic and do them well! Whatever few metrics you decide to visualize, have appendix slides with more KPIs and be prepared with short and crisp answers to questions that will dig into the different metrics. Knowing your metrics, being ready to explain what sits behind them, and being clear and concise with your answers will get you a huge step ahead. I've been in a room a few times where VCs have torn apart founders who don't know their metrics or don't give clear answers, this is basic and should be avoided at all costs. A side note is to know how you compare to other players in the industry or the industry standard metrics as you'd be most probably asked.

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2 Show your traction trends

The second step to demonstrate traction is to show how your metrics have changed over time, and what factors have influenced them. You can use graphs, charts, tables, or other visual aids to illustrate your traction trends, and highlight the key points and insights that you want to convey to your investors. For example, you can show how your revenue or user base has grown month over month, or how your retention or engagement rate has improved after implementing a new feature or strategy. You should also provide some context and comparison for your traction trends, such as your industry benchmarks, your competitors, or your projections.

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Christian Tsanov

Founder & CEO
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Once you've gained traction the conversation becomes about how you've gained it, how can you maintain it, what traction channels are working, and what you believe is the next step. Being able to answer clearly and to the point here again is super crucial. Always keep in mind that the traction channels for one stage of the company don't necessarily work for the next stage of it. Finding traction, being able to explain why and how, and being prepared with your GTM plan for the next phase is a huge plus.

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3 Tell your traction stories

The third step to demonstrate traction is to tell the stories behind your numbers, and how they relate to your problem, solution, and market. You can use case studies, testimonials, feedback, or anecdotes to showcase your traction stories, and how you have created value and impact for your customers, partners, or stakeholders. For example, you can share how you solved a specific pain point for a customer, how you generated a positive word-of-mouth or referral for your product, or how you established a strategic partnership or collaboration with a key player in your industry. You should also emphasize how your traction stories validate your assumptions and hypotheses, and how they inform your next steps and decisions.

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4 Highlight your traction potential

The fourth step to demonstrate traction is to highlight your potential for scaling and growing your startup, and how you plan to achieve it. You can use projections, scenarios, or models to show your traction potential, and how you will leverage your existing assets, resources, and opportunities to reach new markets, customers, or segments. For example, you can show how you will expand your product line or service offering, how you will enter new geographies or channels, or how you will optimize your unit economics or margins. You should also outline your key assumptions and risks for your traction potential, and how you will test and mitigate them.

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5 Align your traction with your ask

The fifth step to demonstrate traction is to align it with your ask, and how you will use the funds or resources that you are seeking from your investors. You should show how your traction supports your valuation, and how you will use the investment to accelerate your growth and profitability. You should also show how your traction aligns with your investors' interests, goals, and expectations, and how you will deliver value and returns to them. For example, you can show how you will use the funds to grow your team, improve your product, acquire more customers, or achieve a specific milestone or metric.

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6 Anticipate your traction questions

The final step to demonstrate traction is to anticipate the questions that your investors may have about your traction, and prepare clear and honest answers for them. You should be ready to explain, justify, and defend your traction metrics, trends, stories, potential, and ask. Additionally, you should provide evidence and data to back them up. It is also important to be open to feedback and suggestions, and show that you are willing to learn and improve from your traction results. Some common traction questions that you may encounter include validating your problem, solution, and market; tracking and calculating your traction metrics; industry benchmarks and competitive advantages; acquiring, retaining, and engaging customers; main challenges and risks for your traction; plans for scaling and growing the startup; how the investment will be used to achieve goals and milestones; as well as exit or growth strategies and opportunities.

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Christian Tsanov

Founder & CEO
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Going deep on the traction typically shows interest, so be excited about that conversation. In a lot of cases, founders go through a number of meetings before they get funded, so a good tip here is to create a file with frequently asked questions by investors. Most of them think in the same way and have similar questions, to write them down and think about answers in advance. Again clarity and conciseness win big time.

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7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?

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How can you demonstrate traction in your pitch?

1

2

3

4

5

6

7

1 Define your traction metrics

2 Show your traction trends

3 Tell your traction stories

4 Highlight your traction potential

5 Align your traction with your ask

6 Anticipate your traction questions

7 Here’s what else to consider

Fundraising

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How can you demonstrate traction in your pitch?

1

2

3

4

5

6

7

1 Define your traction metrics

2 Show your traction trends

3 Tell your traction stories

4 Highlight your traction potential

5 Align your traction with your ask

6 Anticipate your traction questions

7 Here’s what else to consider

Fundraising

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感谢您的反馈

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