Follow Andy Rosic at https://twitter.com/arosic for more!

Do you have something worth pitching?

Investors give money, as we all do, largely based on emotional response. But there are a few key data points that bypass everything and move you to the front of the line for funding.

If you have:

1. Founder proof. Raised money before and created an increased return for those investors (you sold your last company, for example, at a high valuation)
2. Traction. Already built a massive consumer following – users, community, etc. And by massive I mean ChatGPT 1M users in a week, or BeReal’s 300% monthly active user increase every month of 2022.
3. Revenue. Paying customers and revenue is scaling every month by 20%, 30%, 50%+. This shows you have product market fit and also know how to sell!

If you have more than one, look out because you’ll be turning investors away.

What do I need to pitch and win?

For the rest of the founders out there, your job is to prove that you can get to one of these value points. Your emotional hook is your current business success plus the trust and belief in you—that you are the one(s) who can win in this space. Investors care most about traction, team, structure, and business model. If you have some or all of these elements, then they need to shine and pop in your pitch.

If you don’t have them, then are you ready to ask for someone else’s money? And the even better question is what will you stop doing immediately so that you can start selling?

Selling may mean acquiring non-paying consumer users, or it may mean acquiring paying business subscribers, and similar. But it is all selling. Your idea, even your current tech, is easily replicated and sold better by someone else. That’s why investors look right past you. But they can’t ignore success.

Success is that sweet-smelling differentiator between a well-meaning founder with nothing more than a business idea and the resourceful founder who’s willing to do anything to sell and prove that their idea works and that there is a business to scale here. Founders who sell better, even with less product or worse product, will raise money before founders who have sold nothing.

For Pre-Seed and Seed rounds

• Consumer product
  • Active community around your brand – 1k to 5k people who show up regularly
    • Related – prolonged usage stats in your app/service perhaps with fewer users
  • Early viral growth – launch page, pre-orders, signups growing past 10k
  • Signed (or LOI) collab/partnership with major brand
  • Raised angel funding from known individuals or groups

• Business product
  • SMB…That ‘first 100’ customers (even if paying a discounted rate)
  • Ent…Letters of Intent (LOI) from multiple businesses, maybe 1 or 2 sales
  • Announced partnership or integration with a major brand in the space
  • Early viral growth – with a product-led-growth workflow freemium tool
  • Raised angel funding from known individuals or groups

For A rounds

• Consumer product
  • Demonstrated ad revenue growth in a scaling, free product
  • Solid, increasing conversion numbers for a free-to-paid upsell
  • Signups or requested access outstripping capacity
  • Organic and viral growth reaching 100’sK or millions
  • Raised seed funding from other, trusted investors. And they’re returning.

• Business product
  • SMB…100’s – 1000+ paying customers, with major percent growth each month
  • Ent…Rollout and billing of multiple business from your LOI’s
  • Partnership or integration has lead to proven channel growth and new customers
  • Early viral conversion – freemium users upgrade to paid at a strong rate (10%+)
  • Raised seed funding from other, trusted investors. And they’re returning.

Follow Andy Rosic at https://twitter.com/arosic for more!