Understanding the Traction Gap

Venture capital’s grief might be wider than the industry thought: A Series B crunch may be upon us.

And this puts more pressure on entrepreneurs to ensure that their moves into the market go with as few flaws as possible. Here, I want to focus on the Traction Gap, a critical point in the tech process that trips up so many startups.

First, the numbers. In the first quarter of 2016, Series B rounds dropped nearly 40 percent, the largest reduction since the 2008 market correction, according toMattermark.

Late-stage rounds were similarly affected, echoing common themes. The tech bubble is popping and companies not focused on fundamentals are likely to have a difficult time raising subsequent rounds.

Read the full article here.