Startup traction: what it is and how to show it, by stage

Startup traction means you can show that people want what you’re building. They pay, they come back, and weeks or months later they’re still there. A waitlist of 2,000 emails is a hint. Forty-one padel clubs paying €150 a month, and still paying after the summer, is traction.

Why do investors keep asking about it? Because anyone can polish a pitch over a weekend, while six months of renewals take, well, six months. That’s how they tell a business from a good story. What counts as proof shifts with every round, and a few popular numbers only flatter. Selling to Italian companies? You’ll often have to run a pilot first (more on that below). If rounds and stages are new to you, start with the map from zero to a first round.

What counts as startup traction at each stage?

Start at the far end. Subbyx, an Italian company that rents tech devices on subscription, was founded in February 2024. Within 24 months it had €12 million of annual recurring revenue, it had been EBITDA positive since the third quarter of 2025, and in March 2026 it raised a €30 million Series A led by Systemiq Capital. Nobody needs those numbers for a pre-seed, thankfully.

• Pre-seed. A waitlist that converts, a pilot, letters of intent, your first ten paying customers. Y Combinator’s FAQ says that on average 40% of the companies it funds in each batch ‘are just an idea’ and most have no revenue, so at this stage the team carries much of the case (we wrote about what investors look for when you have no track record). Still, 7% of recent YC batches had more than $50,000 in monthly revenue when accepted.
• Seed. Revenue or active use that grows month after month, and customers who stay. Our guide to the metrics investors want at pre-seed and seed has the detail.
• Series A. Growth that repeats without the founder in every sale, and unit economics that hold. CRV, a US venture firm, puts the competitive range for B2B SaaS at $2 million to $5 million of ARR and names founder-dependent sales as the most common gap it sees before a Series A.

Good metrics and vanity metrics

In a 2009 guest post on Tim Ferriss’s blog, Eric Ries said vanity metrics ‘might make you feel good, but they don’t offer clear guidance for what to do’. His examples were total website hits and monthly pageviews. Each of them has a sharper twin.

Vanity metric	Show this instead
App downloads	Weekly active users, and how many are still active after 90 days
Followers, newsletter sign-ups	Share of the waitlist that became paying customers
GMV (gross merchandise value) with no margin	Net revenue, the fees you keep, and the margin on each order
Signed letters of intent	Paid pilots, contracts, invoices
Users since launch	Monthly growth rate and churn
Total MRR only	New, expansion and churned MRR, month by month

Marketplaces fall into the GMV trap most often. a16z’s metrics guide is blunt about it: ‘GMV does not equal revenue!’ Revenue is the fees you charge on each transaction, usually a fraction of GMV. Say your platform moved €2 million of orders at a 3% take rate: your revenue is €60,000, and that’s the figure a fund will rebuild anyway.

Traction on one slide: a six-month example

Say you sell a booking and payments tool to padel clubs in Lombardy at €150 a month. Here’s April to September.

Month	Paying clubs	MRR	Growth on previous month	Clubs lost
April	20	€3,000	n/a	0
May	24	€3,600	+20.0%	0
June	29	€4,350	+20.8%	1
July	33	€4,950	+13.8%	1
August	34	€5,100	+3.0%	2
September	41	€6,150	+20.6%	1

On the slide this becomes one chart and four numbers: 41 paying clubs, €6,150 of MRR, 15% average monthly growth, about 3.6% of clubs lost a month. The 15% is a16z’s compound monthly growth rate, 6,150 divided by 3,000, raised to the power of 1/5, minus 1.

Is that good? In weekly terms it’s about 3.4%, under Graham’s 5-7% and well above the 1% he read as a sign ‘you haven’t yet figured out what you’re doing’. Retention is the line to watch. Losing 3.6% of clubs a month means losing about a third of them in a year, so work out your churn rate properly and put it next to the growth curve. And explain August before anyone asks.

Traction in Italy: pilots, letters of intent and public buyers

Selling B2B in Italy, your first proof is often a pilot: three months with one plant, one branch, one hospital ward. Make it paid, even at a token price. Write down the start date, the end date and the result that turns it into a contract. A free pilot with no exit criterion can run for a year and prove nothing.

Letters of intent are weaker than they look, since a16z counts them as neither revenue nor bookings. Put them in your pipeline with a value and an expected signing date, never in the customer count.

Public buyers deserve a line of their own. Since law 193/2024, signing at least one experimentation contract with a public administration is one of the conditions that let an innovative startup stay in the special register past year three, up to five (MIMIT). It isn’t revenue. It does show that an institution was willing to test you.

Give traction a slide of its own, with the chart and the four numbers; our guide to the 13 slides investors expect shows where it sits in the order. Then get a second opinion. Our pitch deck review gives you a one-page investor read, notes on every slide and the five changes to make first, in 3 to 7 working days.

Related terms

• Your traction slide, if you sell software, will probably show MRR and ARR, which leave out setup fees and implementation projects.
• A year of renewals from the same customers is the kind of lasting traction that makes product-market fit visible.
• If you’re preparing a seed round, expect traction to become the main argument.
• Unit economics, the next thing investors test once growth is proven.
• Need the one-line version? It’s in the traction entry of our startup glossary, with 49 more terms.

This page is general information, not legal or investment advice. Rules change: check the official source or ask a professional before you act.