THE FAKE TRACTION PROBLEM

Summary from the TLDR Founders newsletter

One of the most dangerous moments in fundraising is when a founder starts to believe their own traction before the market has fully validated it. Founders see early interest as proof their companies are working, while investors are more interested in whether that early interest reduces risk. The difference matters as fundraising is not won by proving that people are curious, but by proving that the company is becoming more investible. Fake traction might get founders into investor conversations, but it often fails during diligence.