Survival Strategies for Fintech Startups in a VC Winter

The summer of free money is over: VC funding dropped by $90 billion (53%) in Q3 2022 compared to the same period last year, and slid another $40 billion (33%) from Q2. It’s the slowest quarter since the pandemic began.

Despite the wild ride of 2020, there are possibilities for fintech startups to become champions in the banking and embedded finance industry worth trillions.

Investors are hesitant to back potential projects without customer traction, so if you’re building a fintech product and require funding now, getting it into customers’ hands promptly is key.

Gather feedback, sharpen focus and prioritization, reward customers: that’s how you do it!

Achieve your goals with these 3 tips: 1) Set realistic, achievable targets; 2) Break down tasks into manageable steps; 3) Celebrate successes.

It’s critical to gather feedback and insights from your customers

Everything else being equal, embedded banking startups and new fintechs will live and die on the basis of the user experience they provide.

Embedded banking startups and new fintechs will thrive or fail based on the user experience they offer–all else being equal.

Startups that can demonstrate tangible results are more likely to gain investors’ attention.

Be prepared for investor meetings by having answers to common questions before presenting your pitch deck. What does that look like in practice?

  • Who are your users?
  • What are the problems you’re trying to fix for them?
  • What do they like and what do they want?
  • Where are you going to meet them?

The best way to uncover the answers we seek is to create and ship a working product that people can use. This should be our focus, as everything being developed must contribute towards launching an MVP.

Don’t fall into the trap of creating solutions in search of problems. Avoid overthinking and don’t expect that customers will just come to you – “Build it and they will come” is a myth!

Do you need to build your own payments processor for a consumer fintech startup? In my experience, it would take 10-20 engineers, 18 months and millions of dollars – but may never see the light of day.

In a fintech and embedded banking environment, where products can be launched in as little as three months, 18 months is an eternity. Bain & Co. research predicts that U.S.-based embedded finance transactions will skyrocket from $2.6 trillion to $7 trillion over the next four years – underscoring the importance of speed for capitalizing on opportunities.

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Dylan Williams

Dylan Williams is a multimedia storyteller with a background in video production and graphic design. He has a knack for finding and sharing unique and visually striking stories from around the world.

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