Some founders raise millions with a single text. You’re struggling to get one check. The reason? It comes down to traction or track record…
Track Record
We’ve all heard crazy stories of founders raising millions in a weekend without even a deck. Behind those headlines, you’ll usually find a founder with an incredible track record.
Maybe they sold their last company for $500 million. Maybe they were an early employee of a top startup.
Last year, I invested in two founders who had co-founded billion dollar companies in the past. Founders like that go to the top of any investor’s list.
Sometimes, track record comes in unexpected places.
Demis Hassabis, the founder of DeepMind, was the second ranked chess player in the world as a teenager. This isn’t an accomplishment in business, but it still shows exceptional ability.
Traction
So what about the other 99% of founders? To raise money, you need to show real traction.
Think $500k-$1M ARR in the first 1-2 years. Founders with traction like that can raise a multimillion dollar seed round.
Traction looks different for different sectors.
In deep tech, a good prototype and a strong team can be enough. For consumer social, investors are looking more for user numbers than revenue.
Wrap-Up
Traction and track record are two sides of the same coin.
Track record proves you’ve won before. Traction proves you’re winning now.
I’ve bet on unknown entrepreneurs with incredible traction many times. Some of them have become huge wins.
There’s nothing wrong with being unknown. You just need to bring more to the table.
If you’ve racked up huge wins in the past, let investors know! If not, go all out to show explosive growth in the company you’re building now.
Show you’re extraordinary, and investors will start chasing you.
More on tech:
You’ve Got Your First Customer. Now, How Do You Raise Money?
From Cold DM to Wire in 5 Days: Why I Move Fast on Great Startups
Is Y Combinator — Gasp! — Actually a Bargain Now?
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