MENLO PARK, Calif., June 3, 2016 /PRNewswire/ -- In an era when early-stage companies are measured by the series and size of their latest funding round, Wildcat Venture Partners, a new venture firm, is taking a fresh, new approach.
Last night, in a standing-room only venue attended by entrepreneurs, venture firms, limited partners and the media, the firm hosted an event, "Traversing the Traction Gap," where it debuted the Traction Gap – a framework that describes progressive stages of startup maturity, not tied to financing rounds, during the critical go-to-market phase of a company.
At the event, widely-acclaimed business author, lecturer and company advisor Geoffrey Moore also led a thought-provoking and inspiring panel discussion featuring Doug Merritt, president and CEO, Splunk; Kevin Nix, president and CEO, StellarLoyalty; Louis Beryl, CEO and founder, Earnest; and Rob Bernshteyn, president and CEO, Coupa. These successful CEOs shared how their companies faced an array of challenges and the steps they took to overcome the Traction Gap and scale to ultimately become market leaders.
The firm defines the Traction Gap framework as spanning from a startup's Initial Product Release (IPR) to Minimum Viable Traction (MVT), a point in a company's maturity – whether it be a certain level of revenue growth, engagement, downloads, usage or the like – that demonstrates market validation and signals positive growth trajectory. More detail on the framework is available in the firm's white paper titled, "The Traction Gap Framework".
Correlation Ventures data across thousands of companies shows that less than 25 percent of startups successfully make it to MVT and beyond. According to serial entrepreneur and academician, Steve Blank, "The Lean Launchpad class was developed to help entrepreneurs go from an idea to a product that customers want. The Traction Gap is a much needed framework for the next step in that progression, taking a minimally viable product and growing it to sales repeatability and traction."
Impact of the Traction Gap
Early-stage startups that fail to achieve traction are subject to lower valuations, significant financing risks and sub-optimal outcomes, potentially even shutdown. Wildcat Venture Partners plans to use the Traction Gap framework as a way to leverage its decades of operational and investment experience to help innovative entrepreneurs best position their companies for success.
"My Wildcat partners and I have seen many companies wrestle with the challenges associated with the go-to-market phase of their companies," said Katherine Barr, founding partner at Wildcat Venture Partners. "We developed the Traction Gap framework to provide a pragmatic roadmap for entrepreneurs to follow."
The firm believes that to successfully traverse the Traction Gap, companies must develop core competencies in product, revenue, team and systems architectures. Consequently, the firm plans to roll out Traction Gap workshops and events for entrepreneurs to learn successful strategies and tactics to mitigate risk during the go-to-market phase.
Jon Miller, co-founder of Marketo and now CEO at startup Engagio attended the event and remarked, "All early-stage startups face the Traction Gap. We had the same experience at Marketo: crossing the gap required a well-defined strategy that addressed a combination of product, team, revenue and operational systems."
About Wildcat Venture Partners
Wildcat Venture Partners is a Silicon Valley-based venture capital firm that invests in early-stage software companies targeting an array of markets, including marketing technology, FinTech, digital health, EdTech, marketplaces, enterprise, consumer and the Internet of Things (IoT). The team brings decades of entrepreneurial experience, venture experience, and deep domain expertise to effectively navigate early-stage companies through the Traction Gap. For more information, visit wildcat.vc.
The founding team's investments include many recent leading public and M&A outcomes such as Marketo (MKTO), TicketFly (acquired for $450M by Pandora), Rocket Fuel (FUEL), OpenDNS (acquired for $635M by Cisco), Rally Software (acquired for $530M by CA), Pacific Biosciences (PACB) and Adamas (ADMS), as well as investments in private market leaders, including Kabbage, Coupa, HotChalk, BuildDirect, WorkFusion, Aria, HealthTap and Doximity.
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SOURCE Wildcat Venture Partners