‘Traction’ is the magic word for many VCs. No traction – no funding. But maybe you need funding to build traction? If you are in this catch 22 situation, trust me, you are not alone!

So what to do when you’re still pre-revenue or maybe just have a little bit of traction? How do you convince investors?

For our Startup Funding Book I asked advice from different angel investors and VCs, as well as fellow founders that escaped that catch 22.

Here’s one example from Rebecka Löthman Rydå, Investment Director at Inventure, a VC fund focused on the Nordic and Baltic market:

“Sometimes it can even be misleading to look too much at initial revenue growth since it might not say that much about where you will be in a year or two. At least at the Pre-Seed and Seed stage. We do however love seeing founders showing substantial insight and strong data-driven hypothesis about the market they are taking on.”

“Even if you don’t have revenue yet, make sure you at least can show that you have spoken to a large number of potential customers, found out exactly what their prioritized problem is and analyzed your competitors to the very last detail. With that said I am a fan of companies getting a handful of paying customers early on that they can also closely learn from and build with. If possible, choose these customers carefully so you get a good mix that can help shape your product and strategy in the right direction.”

In addition she says: “Come prepared knowing your numbers, your market and your product inside out. I want to be blown away by how much you know and rather than agreeing to everything I say, show that you know more, and even challenge my input!”

Read more insights in Startup Funding book, the book about investor readiness, fundraising and deal terms that I wrote together with venture capital lawyer Sjoerd Mol to help founders to nail their fundraising process. Order it via bol.com, Amazon or your local bookstore.