The Hierarchy of Traction for (Pre) Seed Tech Founders

Helping you tell a credible, evidence-backed story that reduces the perceived risks of investing in your venture.

When pitching to investors, it’s essential to separate real metrics (which show product acceptance, growth, or revenue potential) from vanity metrics (numbers that look good but don’t really mean much). This hierarchy breaks down the key indicators for both B2B and B2C businesses, helping you tell a credible, evidence-backed story that reduces the perceived risks of investing in your venture.

Real Metrics (Indicators of Strong Traction)

1. Revenue – Monthly / Annual Recurring Revenue (MRR / ARR) (Both B2B and B2C):
Paying customers generating recurring revenue.
B2B: Multi-year contracts, ARR growth, and strong retention from enterprise clients.
B2C: Subscription growth, average revenue per user (ARPU), and improving cohort retention.

2. Contracted ARR (B2B):
Signed agreements for recurring revenue that haven’t yet been realised.
Clear activation timelines and revenue schedules.
Strong conversion rates from pipeline to contracts.

3. Paid Proof of Concepts (PoCs) (B2B):
Short-term, paid trials with potential customers.
High conversion rates from PoCs to long-term contracts.
Evidence of ROI or efficiency gains reported by customers.

4. Trials with Engagement Metrics (Both):
Active product usage that shows genuine interest and potential value.
B2B: Number of users or seats actively testing the product, and the adoption of key features.
B2C: Trial-to-paid conversion rates, along with strong daily or weekly active usage.

5. Letters of Intent (LOIs) with Credibility (B2B):
Non-binding agreements that indicate serious interest from prospective customers.