Traction is absolutely the most powerful asset for raising money. You will find once you've closed that your investors keep pushing for traction at the cost of

Traction is absolutely the most powerful asset for raising money. You will find once you've closed that your investors keep pushing for traction at the cost of everything else including revenue and burn rate. This is because, from their perspective, they want you to create a market for your stock. Which is now also their stock. They want you to do this the same way you created a market when they wanted to buy. With traction. There are several target markets for your stock. Future angel and VC investors. The public markets through an IPO. An acquisition. Traction is good at creating interest in all of these [less so for an IPO]. You can be a very effective CEO from your investors perspective if you spend your career in your startup doing the things that are best at creating a market for your stock. This approach has the highest likelihood of creating a successful outcome in the shortest time for your investors. However, you can not use this approach to build a lasting business or a great business. When your target market becomes investors and your product becomes your stock, you are not only neglecting the fundamentals of building a lasting business - you are working against them. But the reality of the world we live in is that you occasionally need to raise money. So you need to somehow resolve this conflict which I leave as an exercise for the reader. Recommended reading: Jim Collins - Good to Great. Recommended viewing: Boiler Room