Location via proxy:   [ UP ]  
[Report a bug]   [Manage cookies]                
SlideShare a Scribd company logo

Milestones That Get Investor Interest = Traction

•Download as PPTX, PDF•
•

This document outlines the key milestones and traction points for startup founders seeking funding, including developing an idea, creating a product, perfecting the business model, and expanding. It provides examples of what traction might look like at each stage, such as 100-1000 emails or potential customers when developing an idea, 10,000 downloads or 100 paying customers when creating a product, and metrics like customer acquisition costs less than 3 times lifetime value when perfecting the business model. The goal at each stage is described, such as validating assumptions when developing an idea or having a replicable and scalable business model when perfecting it. Sources of funding are also suggested for each phase, like friends and family early on or angels and venture capital later

1 of 31

1

FOUR TRACTION POINTS THAT INTEREST INVESTORS MILESTONES OF FUNDING NEW VENTURES By Kelly Schwedland kellys@elevateventures.com Prepared for Tech Foundry Accelerator Fall 2014

2

FOUR TRACTION POINTS 1. Idea 2. Product 3. Business model 4. Expansion

3

A STARTUP IS A TEMPORARY ORGANIZATION DESIGNED TO SEARCH FOR A REPEATABLE AND SCALABLE BUSINESS MODEL

4

INVESTMENT READINESS LEVEL Mkt Size/Competitive analysis Complete first-pass canvas Problem/Solution Validation Low Fidelity MVP Experiments Validate Product/Market fit Validate right side of canvas Prototype High-Fidelity MVP Validate left-side of canvas Validate metrics that matter Friends and Family Angel investors Venture Capital None

5

$1B+ Market? Scalable Solution? Recurring Revenue? Past Successes? Full team? (Hipster, Hacker, Hustler) Traction? Investment Interest Level

6

DREW HOUSTON, CEO DROPBOX

7

DEVELOPING YOUR IDEA How do I get funding at this stage? Do it yourself (and learn.) SWEAT EQUITY

8

Milestones That Get Investor Interest = Traction

9

DEVELOPING YOUR IDEA Nothing beats a good conversation. GET OUT AND TALK TO POTENTIAL CUSTOMERS

10

DEVELOPING YOUR IDEA Lean Startup Principle: Examples: Lean Startup Challenges, Startup Weekends, Launchrock, Mock ups, WIX, Code Training, Hackathons, etc. USE FREE/CHEAP RESOURCES AND TEST

11

DEVELOPING YOUR IDEA Goal: VALIDATE ASSUMPTIONS - FIND POTENTIAL CUSTOMERS

12

DEVELOPING YOUR IDEA What does traction look like? Examples: 100 – 1000 possible users/emails, 10-15 potential customers, 2-3 letters of intent, 1 enterprise client MOU COMMITMENTS

13

CREATING YOUR PRODUCT How do I fund my prototype? Get creative. Leverage your network. Reach out to friends, family, customers, Kickstarter, Indiegogo, and similar sources. Tell your story. Make a little go a long way. ASK THOSE YOU KNOW

14

CREATING YOUR PRODUCT Essentials Actions: BUILD A TEAM Include a hipster, a hacker and a hustler; In other words, every good team needs a designer, a developer and a business person.

15

CREATING YOUR PRODUCT Lean Startup Principle: • Build an MVP of MVP (Minimum Viable Product of Most Valuable Piece) • Use API’s and other existing resources when possible VALIDATED LEARNING

16

CREATING YOUR PRODUCT GOAL: • Paying customers • Product usage VALIDATE PRODUCT REAL CUSTOMERS

17

CREATING YOUR PRODUCT What does traction look like? Examples: 10,000 downloads, 1000 daily active users, 100+ paying customers, 1 paying enterprise client with 100+ seats ($3K - $5K/month), etc. PROOF OF VALUE TO CUSTOMERS

18

PERFECTING YOUR BUSINESS MODEL How do I fund this thing? ANGELS Prepare your 10 point pitch and share your traction with angel investors, networks, funds, Angel.co, etc.

19

You Need to Get Here! Product/Market Fit: LTV/3 >= CAC You Are Here You’ve only just begun PERFECTING YOUR BUSINESS MODEL

20

PERFECTING YOUR BUSINESS MODEL Essentials Actions: Acquisition Activation Retention Referral Revenue. CONVERSION METRICS

21

PERFECTING YOUR BUSINESS MODEL Lean Startup Principle: Measure progress and prioritize work. INNOVATION ACCOUTING

22

PERFECTING YOUR BUSINESS MODEL GOAL: This equals successful monetization REPLICABLE / SCALABLE BUSINESS MODEL

23

PERFECTING YOUR BUSINESS MODEL What does traction look like? *cost of acquisition is less than 3x lifetime value; $1 in, $3 out • Enterprise: 1000 seats @ $10/seat/mo., • Big Enterprise: 2 pilot contracts and some $ • Social: 100,000 downloads/signups • Marketplace: $50,000 revenue/mo. • E-Commerce: $50,000 revenue/mo. CAC < 3X LTV

24

EXPANSION OF YOUR PRODUCT How do I fund this thing? CASHFLOW? OR VENTURE CAPITAL? Meet with a dozen venture capital firms to find fit and funding for growth.

25

EXPANSION OF YOUR PRODUCT Essentials actions: Execution to metrics, revenue, profits, team growth, key frustration process improvement and acquire niche companies. CONSISTENT GROWTH

26

EXPANSION OF YOUR PRODUCT Lean Startup: Build, measure and learn BML

27

EXPANSION OF YOUR PRODUCT GOAL: What does the door look like: Buyout or IPO? INVESTOR EXIT

28

EXPANSION OF YOUR PRODUCT What does traction look like? Consistently driving customer acquisition and revenue as expected. Finding new avenues for revenue growth. ONGOING ROLLOUT

29

EXPANSION OF YOUR PRODUCT Next steps: Meet with investment bankers and M&A specialists PREPARE TO PITCH

30

QUESTIONS?

31

START HERE. GO FURTHER. WWW.ELEVATEVENTURES.COM

More Related Content

Milestones That Get Investor Interest = Traction

  • 1. FOUR TRACTION POINTS THAT INTEREST INVESTORS MILESTONES OF FUNDING NEW VENTURES By Kelly Schwedland kellys@elevateventures.com Prepared for Tech Foundry Accelerator Fall 2014
  • 2. FOUR TRACTION POINTS 1. Idea 2. Product 3. Business model 4. Expansion
  • 3. A STARTUP IS A TEMPORARY ORGANIZATION DESIGNED TO SEARCH FOR A REPEATABLE AND SCALABLE BUSINESS MODEL
  • 4. INVESTMENT READINESS LEVEL Mkt Size/Competitive analysis Complete first-pass canvas Problem/Solution Validation Low Fidelity MVP Experiments Validate Product/Market fit Validate right side of canvas Prototype High-Fidelity MVP Validate left-side of canvas Validate metrics that matter Friends and Family Angel investors Venture Capital None
  • 5. $1B+ Market? Scalable Solution? Recurring Revenue? Past Successes? Full team? (Hipster, Hacker, Hustler) Traction? Investment Interest Level
  • 7. DEVELOPING YOUR IDEA How do I get funding at this stage? Do it yourself (and learn.) SWEAT EQUITY
  • 9. DEVELOPING YOUR IDEA Nothing beats a good conversation. GET OUT AND TALK TO POTENTIAL CUSTOMERS
  • 10. DEVELOPING YOUR IDEA Lean Startup Principle: Examples: Lean Startup Challenges, Startup Weekends, Launchrock, Mock ups, WIX, Code Training, Hackathons, etc. USE FREE/CHEAP RESOURCES AND TEST
  • 11. DEVELOPING YOUR IDEA Goal: VALIDATE ASSUMPTIONS - FIND POTENTIAL CUSTOMERS
  • 12. DEVELOPING YOUR IDEA What does traction look like? Examples: 100 – 1000 possible users/emails, 10-15 potential customers, 2-3 letters of intent, 1 enterprise client MOU COMMITMENTS
  • 13. CREATING YOUR PRODUCT How do I fund my prototype? Get creative. Leverage your network. Reach out to friends, family, customers, Kickstarter, Indiegogo, and similar sources. Tell your story. Make a little go a long way. ASK THOSE YOU KNOW
  • 14. CREATING YOUR PRODUCT Essentials Actions: BUILD A TEAM Include a hipster, a hacker and a hustler; In other words, every good team needs a designer, a developer and a business person.
  • 15. CREATING YOUR PRODUCT Lean Startup Principle: • Build an MVP of MVP (Minimum Viable Product of Most Valuable Piece) • Use API’s and other existing resources when possible VALIDATED LEARNING
  • 16. CREATING YOUR PRODUCT GOAL: • Paying customers • Product usage VALIDATE PRODUCT REAL CUSTOMERS
  • 17. CREATING YOUR PRODUCT What does traction look like? Examples: 10,000 downloads, 1000 daily active users, 100+ paying customers, 1 paying enterprise client with 100+ seats ($3K - $5K/month), etc. PROOF OF VALUE TO CUSTOMERS
  • 18. PERFECTING YOUR BUSINESS MODEL How do I fund this thing? ANGELS Prepare your 10 point pitch and share your traction with angel investors, networks, funds, Angel.co, etc.
  • 19. You Need to Get Here! Product/Market Fit: LTV/3 >= CAC You Are Here You’ve only just begun PERFECTING YOUR BUSINESS MODEL
  • 20. PERFECTING YOUR BUSINESS MODEL Essentials Actions: Acquisition Activation Retention Referral Revenue. CONVERSION METRICS
  • 21. PERFECTING YOUR BUSINESS MODEL Lean Startup Principle: Measure progress and prioritize work. INNOVATION ACCOUTING
  • 22. PERFECTING YOUR BUSINESS MODEL GOAL: This equals successful monetization REPLICABLE / SCALABLE BUSINESS MODEL
  • 23. PERFECTING YOUR BUSINESS MODEL What does traction look like? *cost of acquisition is less than 3x lifetime value; $1 in, $3 out • Enterprise: 1000 seats @ $10/seat/mo., • Big Enterprise: 2 pilot contracts and some $ • Social: 100,000 downloads/signups • Marketplace: $50,000 revenue/mo. • E-Commerce: $50,000 revenue/mo. CAC < 3X LTV
  • 24. EXPANSION OF YOUR PRODUCT How do I fund this thing? CASHFLOW? OR VENTURE CAPITAL? Meet with a dozen venture capital firms to find fit and funding for growth.
  • 25. EXPANSION OF YOUR PRODUCT Essentials actions: Execution to metrics, revenue, profits, team growth, key frustration process improvement and acquire niche companies. CONSISTENT GROWTH
  • 26. EXPANSION OF YOUR PRODUCT Lean Startup: Build, measure and learn BML
  • 27. EXPANSION OF YOUR PRODUCT GOAL: What does the door look like: Buyout or IPO? INVESTOR EXIT
  • 28. EXPANSION OF YOUR PRODUCT What does traction look like? Consistently driving customer acquisition and revenue as expected. Finding new avenues for revenue growth. ONGOING ROLLOUT
  • 29. EXPANSION OF YOUR PRODUCT Next steps: Meet with investment bankers and M&A specialists PREPARE TO PITCH
  • 31. START HERE. GO FURTHER. WWW.ELEVATEVENTURES.COM