What to Include
The Traction / Key Metrics section is vital for showing the progress you’ve made to date. This demonstrates to investors that there’s real momentum behind your business and that the company has reached a point where scaling is feasible. Metrics help investors evaluate how well the business is performing and its growth potential.
Core Elements:
- Revenue Growth: If applicable, provide a detailed breakdown of monthly or annual revenue growth, highlighting any significant increases.
- Customer Acquisition: Show how customer base is growing—number of users, customers, or clients acquired over time.
- Retention Metrics: Key figures on customer retention, such as churn rate, repeat customers, or subscription renewals.
- Engagement Metrics: Include data on how users are interacting with the product, like DAUs (Daily Active Users), MAUs (Monthly Active Users), or usage frequency.
- Sales Pipeline: If relevant, provide insight into your sales pipeline and any contracts or partnerships in the pipeline.
- Growth Rate: Demonstrate the rate at which your business is growing or scaling.
- Key Partnerships: Include any major partnerships, customers, or clients secured, and the impact they have on business growth.
Where to Source the Information
- Internal Data: Pull information from internal CRM tools, financial data, or analytics platforms like Google Analytics, Mixpanel, or your own sales database.
- Financial Statements: Use financial records for revenue, growth metrics, and profitability information.
- Customer Data: Information from customer surveys, product usage data, or interviews.
- Market Data: Industry reports that benchmark your performance against competitors.
How to Analyze
- Growth Rate: Analyze the rate of change in key metrics (revenue, customers, etc.) over time. Is your business scaling at the pace expected?
- Cohort Analysis: This is especially useful for SaaS businesses or products with recurring revenue. Analyze how different customer cohorts (grouped by acquisition date) perform over time.
- Conversion Rate: Look at the conversion rates at different stages of your funnel (lead-to-customer, trial-to-paid, etc.).
- Unit Economics: Evaluate metrics like customer acquisition cost (CAC), lifetime value (LTV), and gross margins to understand how efficiently the business is scaling.
Format and Structure
- Revenue & Growth Charts: Include graphs or bar charts that show how your revenue or user base has grown over time (monthly, quarterly).
- Customer/Engagement Metrics: Provide charts or tables showing key customer acquisition and retention data.
- Sales Pipeline Data: Include a pipeline chart or table showing how much revenue is expected from leads, deals, or customers that are in the process of being converted.
- Cohort Analysis or Retention Rates: Visualize retention or cohort performance if applicable.
By providing a clear, data-driven picture of your business’s performance and growth, the Traction / Key Metrics section helps investors assess the current success of your business and the potential for future growth.