Is Traction Critical to Startup Funding?


In my recent LinkedinPOST I highlight how investors are making funding decisions based on startups traction more than the innovation in itself.

Given the fact that 9 out of 10 startups fail, investors are trying to diminish their risk by assessing KPI's that show traction.

At the same time, the spread of Crowdfunding has given many early stage startups a good way to test markets, launch brands, nurture brand loyalty, find and retain customers and, ultimately, impress investors.

The main customer-related KPI's* to keep in mind when you want to show traction, depend on what business you are in and they are listed in my Linkedin post.

Also, in some rare cases there are startups that cannot get going without initial funding.  Some of those for instance involve brick and mortar - brick and click businesses.  In those instances, finding an investor is harder but not impossible, you just need to use different elements to appeal to him/her.