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- เผยแพร่เมื่อ 20 มิ.ย. 2024
- How much traction is needed to raise funding?
When you start raising funding, you’re likely going to hear investors tell you that you need more traction in order for them to invest in your startup. But what exactly does needing more traction mean?
That’s what today’s video is all about. I’ll explain what needing more traction means, what you can do to get more traction, and how you can raise money if you don’t have enough traction
I hope you like it.
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To get your free Startup Pitch Deck Template go to: www.brettjfox.com/startup-pitch-deck-template-youtube/
I found your table of traction vs round size to be very insightful. Simple but powerful knowledge.
Always worth it.
Thanks for your kind words. I'm glad you liked the video.
Thanks again for your wisdom.
Excelent video Brett. This question is asked a lot in our environment, and you answered it perfectly. Thanks a lot!
You're welcome, Jorge.I'm glad you liked this video.
Investors want to invest in an innovative, disruptive technology. So you build an innovative product and try showing it to potential customers. You have no brand power, no reputation, no natural search traffic because nobody searches for a product they don't know exists. Every potential customer you approach feels uncomfortable because you approached them. They don't see anyone else using your product and it may take a little time to grasp the usefulness of your product. Cost of sale per unit is therefore at its maximum, but at that point when you need the most help to start the communication with the market none is on offer from investors.
That's right, Paul. That's why market, customer choice, business model, and go to market strategy are just as important, if not more important, than the technology.
@@BrettFoxstartupceo Thanks Brett.
@@paulwwells You're welcome, Paul
@@BrettFoxstartupceo I've probably gone a bit off topic - but if you ask the market before building the product 'would you buy it?' they will mostly say 'no'. That could be because 1: the product is a bad idea or 2: it's a very good idea but the benefits are not immediately obvious. For example, think what market research into the demand for a smartphone would have yielded in 2001. Measuring investability by traction alone could miss some of the best opportunities.
@@paulwwells I understand your point, but I think, using your iphone analogy, there's a better way to look at things. Let's say that Apple was a small fledgling startup that somehow built the iphone and got it to market. Then the iphone started selling, and they raised more funds based on that traction. That's the analogous situation to raising larger sums of money. The initial funding for almost all startups that eventually raise VC funding comes from friends, family, and the founders. That's just how fundraising is in today's world.
Great video! helpful!
Thanks for your kind words. I am glad you liked the video.
@@BrettFoxstartupceo TX. H-Town, I'm working on something, to get off the ground. Like designing a car, each day a little better. It's all there just putting things all together. I want to do it most efficiently.
What if you need, say 3-5 million to build the software first. Without the software, you cannot make sales and you cannot get traction. So you can't get the funding to start. And credit cards, or friends and family won't do for this amount.
It's a great question, Luke. The reality is that you, like countless other founders before you, are going to have find a way to get there. Investors don't care about your personal situation, they only care about making money for their limited partners. You are competing with all the other potential investments, so it's going to be really difficult to raise $3 million without traction.
Thank you for your reply and keep up with your excellent work!
What types of startup companies do you work with?
I work with early stage startups through growth stage startups.
Hey Brett. Any tips on finding angels? I am specifically looking for angels in the impact investing space.
Use your network to start. Just start asking everyone you meet if they can help you. If they say no, then ask if them if they know anyone that might be able to help. Then just keep repeating the process.