How VC investors evaluate products

You need more traction!!Investor criteria when assessing a product

Adam Komarnicki Product Development Days conference, 20 October 2015, Kraków

Innovation Nest

#venturecapital #startups #investing

Fundacity

#SaaS #product #fundraising

Freebee

#loyalty #mobile #customers #analytics

@AKomarnicki

Disclaimer:

All comments here refer to evaluating a PRODUCT

PRODUCT – a piece of software you can sell at scale

Investors don’t care about your product

Investors – they may be cool and friendly…

But make decisions with one simple objective

Whereas you see a set of features

Investors want to see…

Give them what they want

Not all numbers make good metrics Not all numbers make good metrics

Be careful with vanity metrics

Numbers with no direct relation to revenue are „vanity metrics”

App downloads Visitors Press mentions Social media activity

Number of paying customers

MRR, Revenue growth rate

LTV/CAC

Key operating metrics

Product metrics that matter

Growth of key metrics = TRACTION

Presenting a product

FORGET ABOUT THIS, BUT…

TELL A STORY, NOT FEATURES

AVOID DEATH BY PRESENTATION, ENGAGE IN THE CONVERSATION

AVOID TECHNICAL DETAILS - DON’T MAKE INVESTOR FEEL STUPID

RANDOM TIPS

•  Not having a product person in a team is a disadvantage

•  “We need to see more traction” can mean lots of things

•  If investor does not ask to see your product around the first meeting, it’s not smart money 

•  It’s null until you ship - traction for a feature used in another product is not an indication of success of the new product 

IS GOOD, ANY QUESTIONS?