In today’s fast paced ever evolving world, fintech startups have gained significant attention from investors. We’ve completely changed how money is perceived, exchanged and traded. Many new entrepreneurs come up with revolutionary ideas to change and take this revolution even further, however it is not possible without securing the right type of funding.
This blog will share some useful tips helping to understand what pathway to follow to attract investors for your fintech startup.Securing funding to build a fintech app can be a difficult task. Let’s dive into these matters in detail.
Understanding Investors
Attracting investors for your fintech app startups requires more than just innovation. It demands a deep understanding of what drives their investment decisions. Some investors like Venture Capitals look for high risk-high reward opportunities while others look for profitability before investing.
- Industry Experts
Target investors with fintech expertise, their knowledge can provide valuable insights for your startup. Showcase your app’s relevance to emerging themes to resonate with thematic investors.
- Risk vs Return
Investors bet on the potential return on the investment. You have to be prepared to demonstrate your skills of mitigating risks and return on the investment.
- Trends
Investors always look out for what new trend is buzzing in the market. In 2020, it was Crypto, in 2023 it was AI and in upcoming years it is Fintech. Showcase that your app is in the trendy world and is ready to adapt to the changing market condition.
Building strong foundation
Demonstrating that your foundation is solid is important to support your innovation. You must include a unique value proposition to identify the target market and validate your idea.
- Deep Market Understanding
Conduct thorough market research to identify trends and opportunities that are hidden in the market. Look for potential competitors and gain a deep understanding to find the perfect market fit for the final product.
- Business Model
Investors need to convince the business model is viable and scalable. Outline your business to generate revenue plans and scaling options, fees, data monetization, etc. You can change your strategy midway also as per the market trend.
Create MVP
Actions speak louder than words. Investors looking at your idea will surely expect you to have some form of tangible asset or at least a Minimal Viable Product (MVP) to showcase.
- Market Validation
MVP can help to see early traction and market validation for a product for a powerful signal. Building MVP allows you to focus on core functionalities and avoid unnecessary development costs in the early stage.
- Choose the Right Technology
Select the technology that allows you to evolve with time. Be prepared to make changes and improvements based on user feedback and changing market demands.
Create a solid pitch deck
A pitch deck is a concise and visually engaging presentation that showcases the value proposition, business model, and growth potential of the startup. It generally ranges between 10-20 slides. The goal of pitch deck is to convince the investor to invest in your project.
- Start with problem and solution
Begin with a compelling narrative that lets you highlight the pain points the market is facing and how you can solve them. Introduce your application as a hero product helping to solve problems.
- Solution Overview
Use visuals such as screenshots, diagrams, to illustrate how your app works and what makes it innovative. Explain how your app differentiates from the competition and what sets it apart.
- Business Model
Describe clearly your revenue streams, expected returns, cost for consumers, commissions, subscriptions, etc. Outline your cost structure, including development, marketing and operational expenses.
Showcase strong team
Capable team can significantly increase the credibility of your appeal. Here is how you can effectively present your team to the potential investors. Detail the professional background of each team member focusing on experiences that directly relate to fintech, technology and financial services.
- Leadership and Vision
Emphasize the leadership of the team and key team members. Invest more into people as much as you are investing into building the idea. Hire people who know how to execute your vision perfectly.
- Unique Value Proposition
Your UVP sets you apart from others. Define what are your team members’ area of expertise, what makes your team different from others in the fintech space? And how do your team members complement each other?
- Social Proof
Social proof is a powerful way to build credibility with investors. Get feedback from satisfied customers and partners. Highlight any partnerships or collaborations with other companies or organizations.
Demonstrate traction
In the competitive landscape of fintech traction plays a huge role in demonstrating you have the ability to get consumers attention. There are some key metrics investors look at while investing in a fintech startup.
- User Growth
A steadily increasing user base is a strong indicator. Showcasing consistent growth driven by organic marketing campaigns demonstrates your application has retained users.
- Pilot Programs
Successful pilot programs with key players in the industry can be powerful indicators of your application’s ability to showcase its potential. Don’t just present numbers, tell a story behind those numbers and showcase the progress that you’ve made.
Conclusion
Investors need to see a clear path to profitability to secure your investment. Clear communication and a solid business plan can help you land a good seed funding or series A funding from reputed venture capitals. A team with a mix of technical expertise and a vision can help you go a long way.