A founder client recently confided in me during a pitch prep session: "We don't have any traction to show yet."

He didn't want to start fundraising because he was ashamed of his lack of progress.

But here's the thing: this same founder had built a working product, onboarded pilot customers, hired an experienced CTO, and gotten accepted into a prestigious accelerator.

He should have been proud of this momentum. Instead, he was down on himself because he'd internalized a dangerous piece of conventional wisdom: that only ARR counts as traction.

He's not alone. I see this all the time, founders who have made real progress but don't recognize it because they're fixating on one narrow definition of success.
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The ARR trap

Don't get me wrong: revenue is important. For later-stage SaaS companies raising Series A and beyond, ARR is often the primary signal investors look for. It's concrete, it's measurable, and it directly indicates product-market fit.

But somewhere along the way, this advice got misapplied to every stage of every company. And that's created a problem.

Early-stage founders (especially pre-revenue or non-SaaS businesses) are being told that if they don't have ARR, they don't have traction. This isn't just incomplete advice. It's actively harmful.

Here's why fixating on ARR too early can be misleading:

• ARR can lie. Paid pilots with heavy discounts, one-off enterprise deals, or revenue with high churn can all inflate your numbers without proving real product-market fit.
• It doesn't capture progress in non-SaaS businesses. Hardware, biotech, marketplaces, these models have different indicators of progress.
• It creates unnecessary shame. Founders delay fundraising when they shouldn't, or worse, they internalize the idea that they're failing when they're actually learning and de-risking.

The truth is, investors aren't just looking for revenue. They're looking for proof that you're learning, moving fast, and de-risking the business.

And that can take many forms.
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What investors actually want to see

Traction isn't just about SaaS metrics. Traction is about progress, momentum, learning, and proof you're on the right track.

Rather than getting fixated on ARR, here are seven forms of traction that matter just as much, and that you should be showcasing:
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1. Team milestones

Hiring an impressive Head of Product. Bringing on an experienced CTO. Landing a high-profile advisor or board member.

These are huge signals of traction. They show that talented people believe in your vision enough to bet their careers on it. They also demonstrate that you're building the capabilities needed to execute.

When you bring world-class talent onto your team, you're de-risking execution. Investors notice.
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2. Product milestones

Launching a feature that wows users. Hitting a technical breakthrough. Shipping your MVP.

Product progress is traction, even if no one's paying yet. It shows you can build, ship, and iterate. It proves you're solving real problems in creative ways.

If you've gone from idea to working prototype in three months, that's momentum. If users are lighting up in your demos, that's validation. Don't discount it.
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3. Customer milestones

Landing a pilot with a top-tier customer (even if it's not generating revenue yet) is massive traction.

Why? Because prestigious customers are selective. If Google, Nike, or a leading hospital agrees to test your product, it signals that sophisticated buyers see potential. It also gives you the feedback and case study ammunition you'll need to close future deals.

Pilots, design partners, and LOIs (letters of intent) all count. They show that real customers are willing to invest their time and attention in you.
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4. Market learning

Refining your ICP. Discovering that your product resonates better with enterprise customers than SMBs. Figuring out which pain point really drives urgency.

Market learning is often invisible, but it's one of the most valuable forms of traction. Every insight you gain compounds. The faster you learn who your customer is and what they truly need, the faster you can build a repeatable sales motion.

If you've run 50 customer interviews and discovered a breakthrough insight about your market, that's traction. Showcase it.
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5. Go-to-market progress

Figuring out a smarter distribution strategy. Building a repeatable sales process. Discovering a channel that scales.

GTM breakthroughs can be game-changers. Maybe you realized that founder-led sales won't scale, so you hired a VP of Sales and built a playbook. Maybe you discovered that a partnership channel unlocks 10x more leads than outbound.

These milestones show that you're not just building a product, you're building a business.
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6. Pipeline and partnerships

Growing your pipeline of qualified leads. Securing a strategic partnership with a major player in your space.

Even if deals haven't closed yet, a healthy pipeline demonstrates demand. And partnerships signal that established companies see you as credible and valuable.

If you've built a $2M pipeline in 90 days, that's traction. If you've signed a distribution partnership with a Fortune 500 company, that's traction. Don't wait until deals close to showcase this momentum.
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7. De-risking key assumptions

Every startup is built on a stack of assumptions, about the market, the product, the business model. Traction is about proving those assumptions right (or disproving them and pivoting quickly).

Did you validate that customers will actually use your product daily? Did you prove that your unit economics can work? Did you demonstrate technical feasibility for your core innovation?

Each assumption you validate removes risk. And investors are in the business of managing risk. Show them how you've systematically de-risked your business, and you're showing them traction.
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The traction formula: milestones ÷ time

Here's a framework I share with founders: Traction = Milestones ÷ Time

Impressive milestones mean little if they took forever to achieve. Conversely, quick wins over a short period shine bright.

Let's say two founders both land a pilot customer with a Fortune 500 company:

• Founder A took 18 months to get there.
• Founder B took 3 months.

Who has more traction? Founder B, by a mile. The velocity matters as much as the milestone itself.

This is why storytelling matters in fundraising. When you present your traction, frame it with time:

• "In the last 90 days, we onboarded five pilot customers, shipped two major features, and grew our pipeline to $1.5M."
• "Since launching in March, we've gone from zero to 500 active users with a 40% weekly retention rate."

Show the pace. Show the momentum. That's what gets investors excited.
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How to reframe your traction story

If you're preparing to fundraise, here's how to audit and showcase your traction:

1. Make a list of everything you've accomplished. Go beyond revenue. Include hires, product launches, customer wins, partnerships, market insights, everything.

2. Map each milestone to a risk you've reduced. Investors care about de-risked businesses. Show how each achievement makes your success more likely.

3. Organize your story around momentum, not just metrics. Tell the narrative of progress. What have you learned? How have you adapted? What's changed in the last 3–6 months?

4. Put it in your pitch deck. Your "Traction" slide shouldn't just be an ARR chart. It should showcase the full picture of progress: team, product, customers, partnerships, learnings.
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Stop waiting, start showing momentum

That founder I mentioned at the beginning? Once we reframed his story, he realized he had more than enough traction to start conversations with investors. He'd been waiting for permission that he didn't need.

If you've been holding back from fundraising because you think you don't have traction, I want you to ask yourself: What have I actually accomplished in the last 90 days?

Chances are, you've made more progress than you think.

ARR is one signal of traction. But it's not the only one—and for early-stage founders, it's often not even the most important one.

Investors invest in momentum. They invest in founders who are learning fast, moving quickly, and proving that they're on the right track.

So stop selling yourself short. Show them what you've built. Show them how fast you're moving. Show them the momentum.

Show them the bigger picture.

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Raising soon? Let's chat

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