Startups seek to grow as fast as possible.
One of the key barriers to growth is the Sales Learning Curve.
This learning curve is a combination of the product, marketing, and sales working together to create customer acquisition and a product-delivery system that achieves scale and can be maintained.
In seed-stage funding, the investor looks for evidence of initial traction.
In growth-stage funding, the investor looks for evidence of growth traction.
Growth traction indicates the company is growing in a repeatable, predictable manner.
Sales, marketing, and product development are working in concert to achieve that growth.
Forecasting breakout growth without having mastered the sales learning curve will prove disappointing.
Investors looking to fund growth-stage companies look for evidence that the sales learning curve has been done.
This is most often evidenced by a sales funnel with known metrics such as time to close, cost to close, and well-defined steps that show lead generation, qualification, and closing.
In diligencing a company, look at the systems behind the numbers to see how much of the Sales Learning Curve has been done and what is left to do.
The Sales Learning Curve is another barrier – without it, the company won’t be able to generate the revenue necessary to achieve breakout growth.
Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.
Let’s go startup something today.
Thank you for joining your host Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing.
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Hall T Martin is the director of Investor Connect, which is a 501(c)(3) nonprofit dedicated to the education of investors for early-stage funding. All opinions expressed by Hall and podcast guests are solely their own opinions and do not reflect the opinion of Investor Connect. This podcast is for informational purposes only and should not be relied upon for the basis of investment decisions.