Traction = growth = Product-Market-Fit = investor interest!
Illustrating current sales and month-on-month growth shows traction — a key driver for investor interest. This slide is ideal once you've launched and seen growth, demonstrating your venture's viability and trajectory.
Use simple diagrams to show sales and growth from the past year. Key metrics like new users, conversion rates, Monthly Recurring Revenues (MRR), and month-on-month growth are vital for SaaS businesses. Keep this slide updated monthly to reflect real-time business performance.
Traction is gauged by revenue size and growth over at least six months minimum. The content of this slide should align with your venture stage and fundraising aspirations. It is the best proof of Product-Market Fit (PMF) and your company's likelihood of success once you can demonstrate revenue.
For early-stage ventures, focus on growth indicators like fan base increase, app downloads, freemium sign-ups, conversions to paid (if any), and product improvements based on real user feedback.
In B2B with longer sales cycles, demonstrate a quality sales funnel build-up from identified leads to qualified buyers and your closing conversion rates. Highlight how your metrics have improved and how new funding will accelerate these positive trends.
This slide varies per startup model (e.g., B2B/B2C, product or sales-led, direct/indirect) but should always showcase your KPIs and their measurement.
Scale-ups often incorporate the following metrics in their traction slide:
- Revenue Run Rate: Monthly Recurring Revenue (MRR) / Annual Recurring Revenue (ARR)
- Sales Growth Rate: Year-over-Year (YoY), Quarter-over-Quarter (QoQ), and Month-over-Month (MoM)
- Sales Funnel and Conversion Rates
- Annual Contract Value (ACV) (and how it trends upwards)
- Average Sales Cycle: (from initiation to closure)
- Lead Metrics: Conversion from Market Qualified Leads (MQL) to Sales Qualified Leads (SQL)
- Customer Acquisition Cost (CAC)
- CAC Payback time
- Customer Lifetime Value LTV: applicable for businesses older than 3 years)
- Retention Rate (Gross Churn & Net Retention Rate)
- App Store Rankings (especially if B2C)
- Monthly Active Users (MAU)
- Unique Website Visits
- Net Promoter Score (NPS)
- Number of licenses and patents (if applicable)
Be sure to showcase the above KPIs visually in easy-to-understand diagrams, but be mindful to keep them manageable. Having some of this data as supportive data slides and focusing on top-line growth is often wise.
If you’re raising for the pre-seed and seed round with minimal traction, you can use this slide to show feedback from advisors, test users, or the coverage you’ve got until now.
In the context of a therapy health app example, the sales traction slide could detail the following:
▸ Track growth in app downloads over time
▸ Number of initiated therapy sessions
▸ Conversion rate of patients to paying customers, inclusive of insurance or government contributions
▸ Registered therapist count and average number of sessions generated
▸ Related revenue
▸ Number of returning patients with analysis of cohorts by month
▸ Calculated market share growth with the targeted audience (i.e., youngsters) – contingent upon the availability of estimated data from other therapy providers
▸ Number of partnered insurance firms or municipalities indicating traction
Don’t confuse your traction slide with your financials slide. The traction slide should highlight growth and traction data rather than expenses or organizational details.
This slide also needs to communicate that most customers would be disappointed if you discontinued your product! The best way to do this is to show evidence of subscription renewals, monthly active users (MAU), and a low level of churn over time. Detailed data analysis on customer usage always impresses investors!
Questions investors will ask:
- How have you been acquiring customers, and what is your customer acquisition cost?
- What has been the trend in your revenue growth over the past quarters or years?
- How scalable is your revenue growth, and what strategies do you have in place for sustained expansion?
- What is the conversion rate at each stage of your sales funnel?
- What is your customer retention rate, and how do you ensure customer loyalty?
- Can you discuss any strategies you have for reducing churn and increasing customer lifetime value?
- Who are your key clients or accounts, and how do you plan to expand these relationships?
- What percentage of revenue comes from your top customers?
- Can you elaborate on the efficiency of your sales team, including average deal size and sales cycle length?
- Do you have plans for international expansion, and what considerations are involved?
- What key sales efficiency metrics do you track, such as Customer Acquisition Cost (CAC) and Lifetime Value (LTV)?
