Startups create pitch decks to communicate their product ideas to investors. A pitch deck is usually a 10 to 20-slides presentation that describes product vision, value proposition, problems and solutions, and startup traction – amongst other factors.
Traction is a term used to describe how well your business is performing. Traction can be described through different metrics, including the overall revenue, growth rate, and customer satisfaction. The traction slide shows investors that you have established a product-market fit or that there are at least signs you’ll be achieving that soon.
Often, young startups can struggle with composing the traction slide, convinced they lack the necessary information. While describing your product’s past performance and investment prospects can be challenging if you are in the early development stages, it’s unlikely you’ll be able to secure funding without an impressive traction slide. Consistent customer growth, engagement, and revenue are all seen as essential in convincing investors to put money into your business.
The good news is that communicating these values to investors is not really that complicated. Yep, you may not have any paying customers yet, or their spending activity might leave something to be desired. However, there are multiple alternative ways to demonstrate demand for your product or service, even if, for now, it exists only as an idea.
In this article, you will discover how to compose a convincing startup traction slide when you are limited by the amount of data you have.
What to include in your startup traction slide
Numbers always work better than just words. Showing the startup metrics you currently track is beneficial, as it confirms that your business is making progress. Including the following metrics can help show your traction:
- Revenue metrics: Monthly Recurring Revenue (MRR) or Annual Recurring Revenue (ARR);
- Customer metrics: Customer Lifetime Value (LTV), Customer Acquisition Cost (CAC), LTV:CAC ratio, CAC Payback;
- Engagement metrics: Daily Active Users (DAU), Monthly Active Users (MAU).
Early startup traction focuses on demonstrating the first vital signs of product-market fit. The information on the traction slide should explain progress made in product development, strategic partner relationships, feedback from early customers, marketing statistics, and intellectual property. In an overall sense, the traction slide should demonstrate that you’re confidently moving towards reaching your business goals and can show tangible evidence that you are or will be conquering the market.
We’ve built an ultimate guide of what early-stage companies can show off on these slides:
- Product development roadmap: Digital startups can benefit greatly from showing that they have an MVP ready. In producing hardware products, for example, it’s helpful to demonstrate that you have manufacturing in place, an established operational footprint, and an efficient, agile supply chain.
- Team: The success of any new business heavily relies on the strength of its team. Show that you have a team with solid expertise and relevant talent as you build and launch your product.
- Sales funnel: A startup team developing a B2B solution can mention that they already have a list of potential clients and a system for converting those leads into paying customers. Consider showing how your sales funnel is a thought-out, omnichannel strategy for conquering the maximum possible target audience.
- Intellectual property & licenses: All proprietary patented technologies should be secured by proper licensing and copyright. Showing how you protect your intellectual property to prevent copying or reverse engineering by third parties reflects the value and effort you put into your products. Startups in the FinTech or Web3 space should also demonstrate that their solutions are regulatory compliant. Having the necessary licenses and approvals can help you secure funding by instilling confidence in your potential investors.
- Strategic partnerships: If you have already established partnerships, consider mentioning them in the startup traction slide. Partners can provide the resources, expertise, and distribution channels necessary to launch a business and grow it consistently. In addition to resources and expertise, they can also help expand to new markets and strengthen your brand awareness. For those reasons and more, investors pay attention to startup partnerships.
- Traffic: Website activity can be a good indicator of success, demonstrating a strong interest in an upcoming product or customer engagement with an existing one. When assessing a startup, investors often pay attention to the number of beta subscriptions, website visits, user activity, and app downloads. Demonstrating the growth of your website activity in your traction section can significantly add value to your brand.
- Pre-orders: Depending on the chosen revenue model, you can collect upfront payments from future customers or unpaid pre-orders before the product release. This can be a great way to gauge interest in a new product and to generate excitement before its release. If you participate in pre-ordering, show these statistics to your potential investors.
- Testimonials and early customer feedback: Ask early adopters or beta testers to provide feedback. Many early adopters are open to sharing their impressions. Don’t be afraid to reach out to potential customers and ask for their opinions on your solution. You can use this advice as another influential factor in the pitch deck.
- Press coverage: Any positive attention from the press can also be mentioned in a traction slide, as it shows potential investors that you are already dedicated to building brand awareness and credibility while stirring up interest in the upcoming product.
- Any other achievements that reflect your solution: Awards, NPS scores, App Store stats, and Google Play rankings also promote your product’s reputation and are helpful to share in communicating traction.
As you can tell from this list, even if you have no up-and-running product yet, there are multiple ways to demonstrate your product viability and product-market fit. After you collect all the information relevant for your traction slide, the next challenge is proper structuring and presentation.
How to structure a startup traction slide for your pitch deck
A well-composed traction slide is not just about making a good impression by listing your past achievements. Demonstrating that your business is growing rapidly and that your solution is already scalable is also crucial for providing a positive image for this investment.
The slide may come in the form of a timeline or growth trend that visualizes how your company has gained growth momentum over time. Think about describing your journey to date while adding some key achievements to the timeline.
Add your current performance statistics using the available vital metrics – an excellent way to demonstrate you’ve got what it takes to scale.
Partnerships are also one of the critical success factors investors evaluate in their decision-making. If you have any strategic partnerships, mention them on the traction slide, using their company logos:
To make your startup traction slide even more impressive, add reviews from satisfied customers or testers who have already tried your solution:
The traction slide structure we’ve just covered is logically correct and meaningful for investors. Presented this way, the traction paints a clear picture of your startup’s progress with proven facts from both the business and customer sides.
Common startup traction slide mistakes
Forewarned is forearmed! Avoid these mistakes while composing your traction slide if you want the best shot at raising funds from investors:
- Irrelevant data: Remember, you have to captivate the investor with your product through the pitch deck, which means only including the most relevant facts. Take your time to prepare an efficient startup traction presentation by selecting the most striking and meaningful information.
- Overloaded and crammed slides: Remember to keep your pitch deck clear and easily digestible. Here at Waveup, we’ve seen countless amazing stories of stellar growth that were held back by poorly designed slides. Don’t follow the temptation to throw everything you can in there.
- Too many facts and figures on each slide: This can make it impossible for your audience to identify the slide’s essential points. More is not always better. It would be best if you focused your audience’s attention on the information that matters in telling your story. You can even look at your BI dashboards and put your favorite internal metrics on the traction slide.
- Bland slide titles: Composing striking headlines is a must-have skill for making a successful pitch deck. Always introduce your great growth numbers and achievements with a short, eye-catching punchline.
After you have composed and designed your startup traction slide, carefully look through it. You’re close to success if you don’t find any of the above missteps.
Summing up: 3 tips for building an appealing traction slide at the pre-launch stage
Startup teams live and breathe their product ideas. Successful pre-launch fundraising depends on how well you present your idea through a pitch deck. Traction slides are a part of a pitch deck that shows a business’s potential for high growth and low failure risks, as well as helping to build credibility and trust among investors.
We recommend following these three straightforward tips to make an appealing traction slide:
- Include information that proves you’ve found a solid product-market fit and have impressive potential for growth. This tells investors that their financial input will pay off with profit.
- Do not mess with facts. Use only proven and meaningful data to demonstrate your traction.
- Structure your startup traction slide in chronological order, demonstrating progress and achievements over time. Clear and logical structure is the key to communicating the business value of your project.
That’s all it takes for startup traction slides to convert readers into investors.