Fintech Founder Shares 3 Most Important Lessons Learned

By Rachel Carpenter
September 7, 2022

Hello, I’m Rachel Carpenter - the founder and CEO of Intrinio. We’re a fintech company that sells financial data feeds, but my first fintech startup was focused on building stock analysis software. I’ve been running fintech companies and selling to fintech companies for almost a decade.

I’ve been through multiple fundraising rounds, hired dozens of people, sold data to thousands of clients, and I can tell you that among the successes, I’ve made a LOT of mistakes. I think founders should speak more openly about their failures, because it’s a realistic part of the process. 

It’s uncomfortable, but it’s also the source of my strongest growth. “Failure” is actually a core value at Intrinio and my team knows that if they aren’t failing, they aren’t moving, innovating, or experimenting fast enough. 

In the following article, I’ll reveal the three biggest lessons that I’ve learned as a fintech founder. This will help aspiring fintech founders prepare for the challenges that are unique to our industry. 

Okay - let’s dive in.  

1. There are Different Kinds of Fintech Investors - Choose Wisely

Raising capital is your most important job as a fintech founder. Keeping cash flowing can be time-consuming, intense, and frustrating - no matter what kind of founder you are, you have to be resilient. 

But fintech founders are faced with an additional challenge that is unique to financial services.

You may find yourself pitching to the classic retired wall street veteran. This investor will have been an absolute success in their hayday - they’re retired, probably bored, and used to being the singular authority on all things finance. The problem? They’ve been out of the game too long. They aren’t necessarily technology experts, and they’ll spend more time trying to explain to YOU the way things work than learning about your tech.

You could also come across the high net worth individual, family office, or fund that has no background in fintech, but feels the FOMO and wants to be part of the hot fintech industry. This comes with its own host of problems. They provide almost zero value to you outside of capital, and will require so much time to get up to speed that it renders them useless.

Both of these types of investors may understand fintech in terms of PayPal or RobinHood, but if you pitch them anything beyond what they’re used to, you’ll run into problems.

Personally, I spoke to over 100 investors who only understood “financial data” to be a Bloomberg Terminal. They had never heard of an API, and thought we were crazy. I wasted far too much time trying to convince them of the opportunity.

The ideal fintech investor is tech savvy, has some financial industry experience, can get up to speed quickly, will provide advice but trust in your vision, and will never say to you “but this is how it’s always worked”.

The moral of the story? Be picky. Interview the investor right back. Are they B2B or B2C focused? Do they understand AI and ML? Do they seem excited about the future of technology? Be willing and prepared to walk away if they don’t stack up.

2. Cutting Corners With Data Will Sink You

Capital markets fintech startups run off of data - and lots of coffee. It’s our second largest expense, outside of human capital. It’s mission critical for our apps, platforms, and analysis. Our customers rely on it. 

Believe it or not, for my first equity analysis fintech software company, I was scraping the data to power it from thousands of websites. I’ve seen and done it all - scraping, buying cheap, buying sketchy, overpaying, and even building my own solution for data feeds.

I can tell you that most of these options will create massive problems for you down the road. Because data is so mission critical to fintechs, it is NOT the area to cut corners. Going with a traditional data vendor is too expensive, but scraping or using a “too cheap to be true” provider is far too risky - your customers could churn because of bad data. Neither of those outcomes will work for you at a time when showing traction is critical.

I personally sunk so much time into jury rigging our data integration that we ran out of time, cash, and couldn’t afford data from the expensive providers. That’s actually the reason I started Intrinio in the first place! It was a painful lesson to learn - we threw away a year’s worth of code and software - but we learned how important data was and decided to focus on making that easier instead.

Check out our blog - Top 5 Mistakes to Avoid When Buying Financial Data - so you don’t have to also learn this lesson the hard way.

3. Institutions Move 10x Slower Than You Think

Not every fintech company is B2B, but even B2C startups will inevitably align with larger institutions at some point. Perhaps you are prototyping a B2B version of your product, looking for channel partners, or working your way towards M&A.

When you get there, remember that even though all institutions are slow to innovate, for obvious reasons, financial institutions are particularly far behind. Our industry is uniquely swamped with regulation, compliance, rules, and risk-aversion. That makes working with large strategics an even more delicate dance and a tougher path to navigate for fintech founders.

You are hard wired for optimism, speed, and agility - across the table you are dealing with someone who will be hard wired for scrutiny, safety, and conservatism. Startups and institutions have different cultures, risk profiles, strategic priorities, and pace of business. Know thyself, and know your target, and adjust your expectations, priorities, and timelines accordingly.

There are always exceptions to the rule - Intrinio is partnered with a handful of financial industry giants that love our innovative attitude and speed things up for us as we work on different projects together. But we have also been working with one large investment management firm for over two years who has been tangentially interested in various Intrinio products, but keeps getting distracted and shifting strategy. It’s never a bad idea to keep a good relationship like this going, but I’m not joking when I say it can take that long. You have to be really, really careful with your time and resources.

In Conclusion

If you are a fintech founder or CEO, these are all unique challenges that you will likely encounter. They’re tricky to navigate, but stay positive.

  1. There are a variety of “fintech investors” so do your research, ask questions, and choose wisely
  1. Data is mission critical - don’t cut corners, and talk to Intrinio if you have questions
  1. Institutions move 10x slower than you think - be very careful with your resources and time

Choosing a powerful and helpful investor can make you a stronger leader and create a healthy business. Finding the right data partner will help your platform scale seamlessly and encourage your customers to stick around. Patiently aligning with a strategic can open doors and create massive shared value. You got this.

Connect with Leading Fintech Company, Intrinio

If you want to connect with a community of fintech founders who are experiencing the same challenges, and get a free trial of some badass data, request a consultation today.

Thanks for reading – and as we like to say at Intrinio, we can’t wait to see what you build.

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