Traction

Definition

Evidence that people actually use your product, which is the startup world's version of proof of life. Investors ask about traction the way parents ask about grades -- they already suspect the answer is disappointing but want to hear you say it.

Example Usage

"We're seeing great traction with 500 monthly active users, 450 of whom are our employees testing the app and the other 50 are bots."

Related Terms

Advanced

ratchet

An anti-dilution mechanism that adjusts an investor's equity stake if the company raises money at a lower valuation, protecting them from down rounds. Full ratchet is brutal; weighted average is gentler.

🚀 Startup / VC

Advanced

participation rights

A clause letting preferred investors double-dip by getting their liquidation preference back AND participating in the remaining proceeds with common shareholders. It's having your cake, eating it too, and taking a slice of everyone else's.

🚀 Startup / VC

Intermediate

equity crowdfunding

Raising capital from numerous small investors through online platforms, democratizing access to startup investment and the opportunity to lose money on early-stage companies. Kickstarter, but instead of getting a T-shirt, you get illiquid securities.

🚀 Startup / VC

Advanced

drag-along

Rights allowing majority shareholders to force minority shareholders to join in selling the company. Corporate democracy's escape hatch, where your vote doesn't matter if enough people with more shares decide differently.

🚀 Startup / VC

Advanced

dragon

A startup that returns an entire venture fund's value through a single investment, making every other deal in the portfolio irrelevant. Rarer than unicorns and more impactful than a hundred modest successes combined.

🚀 Startup / VC

Beginner

portfolio company

A startup that a VC firm has invested in, now living in their collection like a Pokémon card. Each firm has dozens, knowing most will fail but hoping one becomes a legendary holographic Charizard.

🚀 Startup / VC

Translate This Term

See “Traction” in Corporate Speak, Gen-Z Slang, Pirate Speak, and more.

Try the Translator

Share This Term

Post on X Share on Facebook Share on LinkedIn

Discover a Term

Beginner

missions

In military and corporate contexts, specific assignments or objectives that must be accomplished, usually with more grav...