Link: The Founder’s Guide to Understanding Investors
“Having a great product is important, but having great product distribution is more important… What a lot of people fail to realize is that without great distribution, the product dies.” – Reid Hoffman (founder of LinkedIn, early investor in Facebook, Airbnb, and Zynga)
To believe the startup can fulfill grand slam potential, investors want to see the startup has verified their assumptions on how users find the product in a repeatable and scalable manner. This is also called a go-to-market strategy (GTM).
For early-stage founders, you barely have enough time to grow, let alone build a product. Investors understand this and don’t expect you to have a fleshed out GTM. As you near your Series A, it’s important to test your assumptions about how the startup will grow and then share your preliminary findings.
For later stage founders (post-Series A), investors need to know your GTM works. They need to have confidence you won’t recklessly burn through cash as you hit the gas and attempt to significantly grow your user base.