Traction in business stands for the progress of a start-up company and the momentum it gains as the business grows.
This concept is mostly used when talking about investor relations. Higher traction attracts investors and more investors ensure more funds for the business to succeed. For start-ups, developing traction is a large part of their business growth plan. To put it simply, the companies need to prove to the investors that their product or service is needed on the market and the people are willing to or already buying it.
Demonstrating traction is generally easier for companies that already have paying customers. However, investors also want to see proof of effort in management, product development and other areas of the business to be convinced of the company’s potential and value.