Traction refers to the progress and momentum that a start-up has gained in its early stages of development.
Showing traction is an important aspect of convincing investors to fund a start-up, as it demonstrates that the company is making progress and has the potential to grow and succeed.
There are several ways that a start-up can show it has traction, including by demonstrating:
Growing user base: Showing that the start-up has a growing user base and is attracting new customers can demonstrate that the product or service is in demand and has the potential to scale.
Increasing revenue: Demonstrating that the start-up is generating increasing revenue and is on a path to profitability can show that the business model is working and that the company is making progress. Investors also like to see annual recurring revenue (ARR), monthly recurring revenue (MRR).
Positive customer feedback: Sharing positive customer feedback and testimonials can show that the product or service is meeting a need and is well-received by users. This includes Trustpilot reviews, or a positive NPS score.
Partnerships and collaborations: Showing that the start-up is partnering with other companies or organizations can demonstrate that it is gaining traction and is viewed as a credible and valuable player in the industry.
- Press coverage: Securing press coverage and media attention can demonstrate that the start-up is gaining visibility and recognition in the industry.
It is important to be able to clearly and concisely communicate the progress and momentum that the start-up has gained to date.
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