Brian Nichols is the co-founder of Angel Squad, a community where you’ll learn how to angel invest and get a chance to invest as little as $1k into Hustle Fund's top performing early-stage startups

Most pre-seed companies don't have revenue. They might have a couple of customers. Maybe some pilots that people agreed to. Possibly some early users who aren't paying yet.

So when angels and VCs talk about wanting "traction," what are they actually looking for?

They're not looking for impressive numbers. They're looking for proof you can execute.

What traction means at different stages

At pre-seed, investors bet on the team. Your numbers probably aren't impressive yet. You don't have enough data to prove product-market fit.

But you should have something. Customer interviews that validate the problem. A prototype that people actually use. Pilots that turned into paying customers. Design partners who will give you feedback.

"Most of the companies we invest in at pre-seed generally don't have any revenue or very limited revenue and certainly not enough revenue to say, oh, this is working," Elizabeth said at an Angel Squad event. "It may be a couple of customers or it could be a couple of pilots that are agreed upon or even paid but not retained."

The question investors ask: can this team ship product and get people to care?

At seed stage, expectations change. You've shipped your MVP and have feedback from real users. Typical traction range at seed: $10K+ monthly recurring revenue. But even this isn't a hard rule. Some companies raise seed rounds with zero revenue if their growth and engagement numbers are compelling.

The traction that matters most

Raw numbers don't mean much without context. Here's what investors actually evaluate:

Speed of execution. How fast did you go from idea to product to customers? Quick iteration signals you can move faster than competitors.

Customer validation. Do people care about what you built? Are they using it consistently? Would they be upset if it went away?

Understanding of the problem. Can you articulate exactly what pain point you're solving? Do you understand your customers deeply?

Path to scale. Even if your numbers are small, is there a clear path to making them bigger?

One portfolio company went from $8K quarterly revenue to $46K in nine months. That's 6x growth. The absolute numbers weren't huge, but the trajectory proved the team could execute.

Another company had domain expertise from years in the insurance industry. The founder's parents had been in insurance, giving him credibility and a network to tap. That background mattered more than early revenue.

How to frame your traction narrative

The mistake founders make is leading with numbers that don't sound impressive.

"We have $3K MRR" makes investors tune out. They hear "tiny revenue" and stop listening.

Instead, frame it around proof points:

"We launched 8 weeks ago and already have 12 paying customers, including two Fortune 500 companies in pilots."

"Our users are engaging 4x per week on average, which is higher than Category Leader's engagement rate."

"We've done 150 customer interviews and validated that this problem costs companies $50K per year in lost productivity."

These statements use your traction to prove something about market demand, product stickiness, or your ability to sell to large customers.

Context matters more than the raw number.

What to do when you don't have traction yet

If you're truly pre-traction, focus on proving you understand the market deeply.

Show your customer discovery work. How many interviews did you do? What did you learn? What surprised you? How did that change your approach?

Demonstrate domain expertise. Have you worked in this industry for years? Do you have an unfair advantage in distribution? Do you understand the buying process better than others?

Show early signals of demand. Did you put up a landing page and get signups? Did people give you money before you built anything? Are design partners lined up to test the product?

At Hustle Fund, we look for founders who have edge. Maybe they know how to sell quickly because they've done it before. Maybe they have deep technical expertise that lets them build faster. Maybe they have unique distribution access.

Your traction might not be revenue. It might be the advantage you have that will lead to revenue.

The GTM strategy that sells investors

Investors want to see you've thought through go-to-market. Having traction is good. Knowing how to replicate and scale that traction is better.

Your GTM strategy should address: early users (how did you get your first customers?), distribution channels (where will you find more customers?), customer acquisition cost (what does it cost to land a customer?), and competitive positioning (why will customers choose you?).

Even if your current traction is small, a clear GTM strategy shows investors you know how to grow.

"Think about traction more in terms of ability to execute rather than specific numbers," Elizabeth advises. "Your numbers don't have to be great, but early-stage investors want to see that you can move quickly and experiment with different tactics."

When traction isn't enough

Sometimes founders have decent traction but still struggle to raise. Why?

Wrong market. If your TAM is too small, even good traction won't excite VCs who need 100x returns. Consider raising from angels instead.

Valuation too high. If you're asking for $100M post-money valuation, you need way more traction to justify it. Terms matter.

Crowded space. If there are 20 competitors all showing similar traction, you need differentiation. Being one of many similar companies isn't exciting.

No clear use of funds. If investors can't see how their capital will accelerate growth, they won't invest. What specifically will you do with the money?

At Hustle Fund, we think about every investment in terms of portfolio construction. We diversify across geography, founder archetype, industry, market risk vs. technical risk. Your company might have traction but not fit what we need for balance.

That doesn't mean you're un-fundable. It means you need to find investors whose thesis aligns with what you're building.

Making traction tangible

The best way to leverage traction is making it visible and easy to understand.

Create a simple metrics dashboard you can share. Revenue, users, growth rate, engagement. Don't bury the good stuff.

Tell customer stories. Not just "we have 20 customers" but "here's how we helped Company X reduce costs by 40%."

Show momentum. What changed in the last 90 days? What will change in the next 90 days? Growth trajectory matters more than current state.

Be honest about challenges. Every company has risks. Acknowledging them builds credibility.

One exercise: write out your last six months of progress as bullet points. If someone read only that list, would they be excited? If not, you either need more traction or better storytelling.

Traction gives you leverage in fundraising, but only if you frame it correctly. The numbers matter less than what they prove about your ability to execute. If you're building traction and want to see how other founders position their metrics to attract angels, Angel Squad provides real examples and feedback. You'll learn what actually moves investors to write checks, not what sounds good in theory. Because at the end of the day, the best traction is the check clearing in your bank account.