Evidence you have found product-market fit. One sign is that you are no longer changing your website, sales powerpoint, product, app, every time you need to acquire a customer. . Now it's time to raise money to acquire paying customers . Team. You have a core team that can build the first product and get early sales. The cycle: Hypothesis > Experiment > Data > Insight > Validate/Invalidate/Modify Hypothesis. Product. At this stage you have a high-fidelity product that earlyvangelists can use and pay for. Enough that you can gauge customers' price sensitivity, depth of engagement, etc. . The three-year product roadmap gets earlyvangelists engaged. Traction. Investors want to focus on traction. You need to provide proof that your customers love and can't live without your product. You've built detailed analytics tracking into your product, should be seeing organic and viral growth, and can provide daily/weekly/monthly active users and 30/90/120-day retention. Retention and low attribution are good signs of customer validation. . Your annual recurring revenue (ARR) and revenue milestones will depend on what business you’re in. For example, not all revenue is recurring and even in a subscription model for a consumer goods company, your recurring revenue will not be valued the same as if you’re selling enterprise software, where operating costs are so vastly different. As an example, $1 of revenue for a direct to consumer company is worth ~$1 in valuation at scale (Zappos was sold for $1 billion when they had $1 billion in sales). On the other hand, in a SaaS business $1 in recurring annual revenue equals ~10x in valuation. Business Model. Testing revenue models/pricing, resources, activities, and partners . Market. Why the data validates that this is going to be a huge market. The founders usually do the first sale, then they must prove their first salespeople can repeat that sale. Documents needed. Term Sheet. Stock Purchase Agreement. Amended and Restated Certificate of Incorporation. Investors’ Rights Agreement. Right of First Refusal and Co-Sale Agreement. Voting Agreement.