If You're Under $20k MRR and Pitching Investors, Here's How To Pitch Your Traction Slide

I work on a lot of investor pitch decks every month.

But whenever I work with a company doing under $20k MRR (Monthly Recurring Revenue), I see this common mistake...

They show me their ‘Traction’ slide, and they say something like, “We’re doing $12k in monthly revenue with plans to scale to $1 million annual revenue by end of year.”

You might read that and think ‘so what’s the problem?’

Well, investors tell them that for a post-revenue company they should be doing more than [insert under $20k MRR number].

Here’s the challenge: Making a little bit of money often looks worse than making no money.

If you aren’t making money yet (aka PRE-revenue), everything can be chalked up to projections, and you can get away with more hypothesis and conjecture.

But if you’re making a *little bit of money* (aka POST-revenue), those projections have a baseline to be measured against. And selling the idea of 5x, 10x, or 20x growth is clouded by the reality that you’re only doing a few thousand MRR right now.

It’s like trying to say “I can jump really high” versus “I know I have this anchor tied to my leg but I can still jump really high”.

(And don’t get me started on the additional bias likely to come into play if you are a woman, BIPOC, or other traditionally underrepresented founder.)

Whenever this issue comes up, we do one thing in particular with our clients to control the narrative.

The Revenue Engine Technique

If you’re making more than $0 MRR but less than $20k MRR, here’s what to do…

Position yourself as a PRE-revenue company.

Yes, you read that right.

“But we’re making money, how do we say we’re pre-revenue?”

It's easy -- I call it the Revenue Engine Technique (RET).

The Revenue Engine Technique starts by reframing your understanding of the words pre-revenue and post-revenue.

Pre-revenue doesn’t solely mean making no money, and post-revenue doesn’t solely mean making any money.

It’s about your Revenue Engine.

Old pre-revenue definition: My company hasn’t generated any revenue yet.

Old post-revenue definition: My company is generating revenue of any amount.

NEW pre-revenue definition: My company either hasn’t generated revenue yet, OR my company is making some money, but we have not yet turned on our Revenue Engine to where we have a repeatable, scalable, revenue-generating system in place (typically $20k MRR or less).

NEW post-revenue definition: My company has its Revenue Engine figured out and turned on. We’re not just making money, we have a repeatable, scalable, revenue-generating system in place where we know what growth levers to pull (typically more than $20k MRR).

If you’re making money off a handful of inbound leads every month, or a little bit of outbound, or saw a spike from attending a trade show or being featured in a news article, that’s awesome. But those aren’t sustainable, repeatable outputs, nor have you scaled any of your efforts.

So if that’s you, you are a PRE-revenue company.

Most companies can putts around and fumble their way up to $20k MRR. (In fact, I could make the argument that it even applies up to $50k MRR, but that's another story).

With this new definition, here’s how you execute the Revenue Engine Technique…

1. Pitch your traction slide by adding up your aggregate revenue.
2. State you’re in pre-revenue mode.

For example, let’s say a company has done $12k MRR for the last 6 months, and is trying to scale to $50k MRR by end of year.

$12k x 6 = $72k.

Old pitch: “We’re doing $12k MRR with plans to scale to $50k MRR by year end.”

Revenue Engine Technique pitch: “We’ve already accumulated $72k the last 6 months while still being in pre-revenue mode. This gives us a cushion for strategic decision-making and a launchpad to build up our Revenue Engine so we scale to $50k MRR before the year is over.”

Now your traction isn’t about what you haven’t achieved, it’s about what you CAN achieve.

The Revenue Engine Technique is one of our key strategies in getting under $20k MRR companies in position to overcome the traction objection, win over investors, and win pitch competitions.

Try it out and let me know your results.

And before you go, please drop a like and let me know in the comments below...

What’s the biggest objection you’re receiving in your pitch?

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