Do I need traction as in revenue to get venture capital funding?

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Traction does not mean revenue!!!

Damn I wish investors would stop broadly giving a soft “No” to entrepreneurs by saying, “focus on getting customers, when you have some revenue, come back to us…” it is screwing up our ability to bring good ideas to life.

Is revenue AN option to validate traction? Sure, of course, if you have a product or service that warrants getting customers at this stage.

For most entrepreneurs, our economy is perpetuating the idea that startups should have customers and it’s causing founders to prioritize and listen to customers too soon.

Customers can mislead. Revenue disrupts focus. Heck, if/when you have revenue, you have less need for venture capital.

Don’t misunderstand me, some startups should be chasing customers and revenue early. Many should not be! And investors being too uncertain or inexperienced, with no confidence, to simply say, “no thank you,” are not helping.

What is other (often more significant) evidence of traction?

  • Press coverage
  • Attracting an amazing team
  • Early investment or notable investors
  • Notable advisors
  • Partners
  • Distribution channels
  • Clear and validated business metrics

Traction means you have something worth consideration and in innovation (when you are inventing something anew) usually that shouldn’t mean customers.

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