Fintech is anticipated to expand at a rate of 23.41% this year, reaching $324billion by 2026. Financial service companies are seeking guidance on how to remain ahead of the curve in the fast-paced fintech world.
Relevant Software has conducted an interview with six founders of promising fintech startups. They shared their vision on what was the hardest part of this journey. These are the lessons they learned facing these challenges:
Build your financial strategy
No wonder that the most challenging part of launching a startup is the process of fundraising. Usually, founders have never done fundraising before, and they don’t know how investors think.
As Katya Dorofejeva, co-founder and CEO at Finadvant, recalls, they focused more on revenues and how much money their clients would pay them, so they can become profitable. To their surprise, investors don’t need a startup to become a profit-making business. Instead, they place a greater emphasis on factors such as the number of consumers. Investors want to give you money and get your valuation up, so they can make a good deal afterwards.
Also, many investors are trying to diversify their assets and are increasingly interested in direct investments. Robert Pasco, the co-founder of Plend, had a lot of people signing up on their waitlist, which has been very exciting.
Their challenge was creating a quality ‘asset class’ for these lenders – which were the near-prime borrowers who came because they have been rejected elsewhere.
“At the moment, the consumer credit market it’s very saturated, and there are so many options out there for borrowers. So if you’re too late, they may well go elsewhere and pick up a more expensive credit product.
We’ve got a couple of partnerships lined up with third parties affiliates in this space, but ultimately, it’s something we have to actively manage and ensure we have enough volume coming through to the platform”, says Pasco.
The best bit of advice Adam Sheldon, founder and CEO at Elevation Digital, has received when it comes to fundraising is that “investors don’t want to meet with you, they don’t want to speak with you, they want to hear about you, and then get in touch.”
In the world of venture capital, you need to be bold and engaging to get your name out there.
“Being bold in the market, really championing your solution and your vision is what investors are looking for.”
But fundraising is not the only challenge. Employees are a company’s greatest asset as well.
Surround yourself with relevant team
Toby Lewis, founder and CEO at Novum Insights, states that building a company is about the people you surround yourself with and how they work together as a team. You can get quite far, especially if you have tech skills, but you need people to build a business. Make sure everyone is committed to the long-term success of the organisation. Try to understand what everyone’s needs are and who’s motivated by what.
He also adds: ”The hardest part is about learning how to lead and gel with the company, and then the other half is about being really laser-focused in how do you build a scalable business.”
Find your perfect co-match
Two heads are better than one, therefore find yourself a trustworthy co-founder. It will have an impact on and change everything for you, including how you create your startup, how you deal with failures, how you use your networks, and so on. Having a co-founder is really beneficial, especially when starting a business for the first time.
Katya Dorofejeva and Adam Sheldon agreed on the vision of keeping realistic plans.
The fintech founders should keep in mind that the market is quite saturated right now, so they should be realistic. Simply having a good idea isn’t enough; if the solution isn’t agile, you won’t get very far.
Concentrate on not only moving quickly but also keeping a realistic deadline in mind. Throughout your solution, make sure you understand your value proposition, the problem you’re solving, and the user path.
Do a profound research
Even if you are a seasoned professional, you will discover that there are many things you are unaware of and must learn. So, “do your research” would be definitely the number one piece of advice, from Koray Koska, founder, and CEO at VitraCash. Six months before the fundraising campaign, he researched how to launch a product, the suppliers and licenses they needed, the regulations they had to follow, etc.
You may achieve it with the help of advisers as well. Nikos Melachrinos knows a thing or two about it as he shared with us: “You can find advisors among your investors. So when you’re picking investors, it’s essential to choose people with knowledge that you don’t have so that they can share their expertise with you. Of course, talking to other founders is an excellent source of knowledge too.”