Double your valuation

You can have the most leverage raising money for your startup if you have data to support your idea.

Raising money is complex. I hear a lot about the importance of elevator pitches and celebrity incubators. But in your pitch deck, you should just answer these questions:

• How many people would want to use what you're building?
• What would they pay for it?
• When would they use your app/site/service?
• Why do they think they want it?

These are covered in presentations I've seen, but it's often handwaving, like: "Well, (other company) is an X-billion-dollar business; if we just got 1% of that then we'd be huge!"

You could answer these questions with a census: Ask everyone on the Internet yes or no and calculate your potential market size. But just as good, you can use statistical sampling (like Nate Silver). For example, here's a representative survey that shows 16% of people on the Internet have a personal website (US-only). Long-form content startups: Did you know that?

Data frames your opportunity. It puts a ceiling on your growth. It describes the challenge you're facing. It highlights how your target market is underserved. It identifies your initial customers. If you're pitching a startup today, please have data to back up your idea!

Without data you only have your wits. With data you have the truth.