All #AskJason: My startup has traction but no investors. Is the problem pitch or product? | Summary and Q&A

TL;DR

A startup with traction and a solid team but struggling to attract investors may need to focus on growth, team inspiration, market potential, and pitch improvement.

Key Insights

• 😤 Investors may not be excited about a startup despite traction due to several factors, including uninspiring team, misconceptions about market potential, or perceiving the startup's novelty as a fad.
• 🈷️ Demonstrating definitive growth is essential to attract investors, especially through clear month-over-month revenue growth.
• ❓ Startups should actively seek candid feedback from investors to learn and improve their pitch, product, or market strategy.

Transcript

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Questions & Answers

Q: Is the lack of investor excitement due to the startup's team, pitch, or product?

It could be any combination of those factors. The team's lack of inspiration or doubts about their ability to execute can deter investors. Overestimating market potential or perceiving the startup's novelty as a fad can also be factors. Evaluating and improving these aspects is crucial.

Q: How can the startup prove its worth to investors?

Demonstrating definitive month-over-month growth, especially in the case of software-as-a-service startups, is key. Providing clear evidence of consistent revenue growth and focusing on what is within their control can increase the chances of attracting investors.

Q: What can the startup do if investors are not giving them valuable feedback?

In a follow-up email, the startup can kindly ask for candid feedback, emphasizing their desire to learn from the investors' perspective. If earlier feedback seems sugarcoated, they can request an unsugarcoated version, greatly benefiting from honest insights to improve their pitch, product, or other areas.

Q: How important is the team in attracting investors?

The team's ability to execute and inspire confidence plays a significant role in attracting investors. Investors want to see a team that can take the idea to success and navigate challenges effectively. Building a strong and capable team is crucial for investor interest.

Summary & Key Takeaways

• The startup in question has traction and operates in a high-growth market, but investors are not excited due to potentially lacking high growth traction and an uninspiring team.

• Investors' lack of excitement could stem from doubts about the team's ability to take the idea to success, potential overestimation of the market's growth, or perceiving the startup's novelty as a fad or gimmick.

• To address the issue, the startup should prioritize demonstrating definitive growth, consider asking investors for candid feedback, and focus on what they can control, such as the growth around the startup.