Traction trumps everything

 
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If you ask an angel investor what they look for in a company, they'll usually rattle off a list of things that describe the ideal angel investment: huge market, great team, superior product, sustainable competitive advantage, etc. Trouble is, even if your startup has those things (and most don't), you still have to convince each investor.

Good thing there is a shortcut: traction. If you show investors some traction, the rest of the conversation becomes a lot easier. They'll generally be willing to overlook some of your deficiencies, probably even more than they should. 

Traction is real customers. If you charge for your product, it's real paying customers. If your product is free, it's a real user base. In other words, traction is a signal that your team can produce real results in a real market.

You don't need much traction to entice investors. In fact, people like myself prefer just a little because when you have a lot your valuation will probably be too high. The ideal scenario from my perspective is you already got a bit of traction, and you know how to get more with some investment. 

You played around with various traction verticals and you identified a few promising ones that brought in your early customers. Now you just need $x to experiment more heavily with those channels. That's a compelling story.

I should also point out that once you have traction, you may not need investors at all. 

 

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I'm the Founder & CEO of DuckDuckGo, the search engine that doesn't track you. I'm also the co-author of Traction, the book that helps you get customer growth. More about me.