Now more than ever, there is a stark difference between the fintech companies that make it long term and those that fizzle out after the initial buzz dies down. While any reasonably forward-thinking fintech founder can develop a good idea into a profitable concept, without sustained interest among investors, that idea isn’t going to lead anywhere.
Just what is it that leads some fintechs to multiple killer rounds of fundraising and others to the chopping block? According to tech entrepreneur and B9 Co-Founder Sergey Mosunov, it’s all about funnels.
“Everything in consumer finance is based on funnels, such as marketing, sales, risk, etc.,” Mosunov wrote in a recent article. “Investors know about these funnels and pay attention to the way founders present them.” To that end, when presenting to potential investors, it’s critical for fintech heads to have not only a wide array of important metrics about their company (user base, profitability, marketing statistics), but have them sorted into the funnels that investors experienced in a particular sector will be looking for first.
“So-called neobanks,” Mosunov wrote by way of example, “might be guided by indicators related to monthly active users and daily active users, as the entire profitability of the company is based on the client’s involvement and their actions.”