Let’s talk about something that’s been on my mind lately as a start-up founder: traction. You know, that magical word investors love to throw around. “Show me traction, and I’ll show you the money.” But here’s the thing—traction isn’t just a buzzword. It’s the lifeblood of early-stage start-ups, and it’s becoming the golden ticket to unlocking investor wallets.
Here’s the reality: traction equals sales, and sales equal less risk. Investors aren’t just being picky; they’re being smart. They want to see that your idea isn’t just a cool concept but something people are willing to pay for. And honestly, can you blame them? If I were putting my money into a start-up, I’d want to see some proof that it’s not going to vanish into the start-up graveyard.
But here’s where it gets interesting. Some seed funds are starting to price themselves out of the ecosystem. They’re demanding so much traction at the seed stage that it feels like they’re asking for Series A-level metrics. It’s like showing up to a first date and being asked for a five-year life plan. Sure, ambition is great, but let’s not forget that seed funding is supposed to help start-ups get traction, not just reward those who already have it.
And to the seed funds out there: it’s time to get back in your lane. Seed funding is about taking risks on early-stage ideas and founders with potential. If you’re only backing start-ups that already have significant traction, you’re not really doing your job. You’re acting like a Series A fund with a seed-stage ego. The truth is, if you don’t start embracing risk again, you’re going to be left behind. Founders are finding other ways to fund their dreams—bootstrapping, crowdfunding, revenue-based financing—and by the time these start-ups come knocking on your door, they won’t need you anymore.
So, what happens when seed funding dries up or becomes hyper-selective? Start-ups have to get creative. And honestly, that’s not necessarily a bad thing. Here’s what I think we should be focusing on if the traditional seed funding route isn’t an option:
-
Bootstrap Like Your Life Depends on It Revenue is king. If you can generate sales early, even if they’re small, you’re proving your concept and building a foundation. Plus, nothing impresses investors more than a founder who’s scrappy enough to make it work without their money.
-
Focus on Customer Love Traction isn’t just about revenue; it’s about engagement. If you can show that your customers are obsessed with your product, that’s a huge signal to investors. Build a community, listen to feedback, and create something people can’t live without.
-
Leverage Alternative Funding Crowdfunding, revenue-based financing, or even strategic partnerships can be great ways to fund your growth without giving away equity too early. Explore all your options—there’s more out there than just venture capital.
-
Be Ruthlessly Efficient If you’re not getting seed funding, you need to stretch every dollar. Focus on your core product, cut unnecessary expenses, and prioritise what will actually move the needle.
-
Network Like Crazy Sometimes, it’s not about what you know but who you know. Build relationships with potential investors long before you need their money. Show them your progress over time, and when you’re ready to raise, they’ll already believe in you.
At the end of the day, the start-up game is about resilience. Yes, investors want traction, and yes, it’s harder than ever to get seed funding. But that doesn’t mean it’s impossible. It just means we need to be smarter, leaner, and more focused than ever before.
So, to my fellow founders: keep grinding. Build something people want, prove it with revenue, and don’t wait for permission to succeed. And to the seed funds out there: remember your role. Take risks, back bold ideas, and support founders early. Otherwise, you might just find yourselves sidelined in the ecosystem you’re trying to help grow.