The decade long summer of free money is over. The amount of venture funding fell in the third quarter from a year ago and in the second quarter from a year ago. Since the beginning of the Pandemic, Q3 has been the slowest quarter for VC funding.
In spite of all the crazy stories this year, there are real opportunities to become the new heroes of the multitrillion dollar banking and embedded finance industry.
I am hearing that investors are hesitant to invest in future potential unless there is concrete customer traction. It is important to get your product into the hands of customers as soon as possible if you want to get funding.
What will you do to do that? By getting feedback, you can use it to improve your focus and prioritize your work.
There are three ways to achieve those goals.
Everything else being equal, embedded banking startups and new fintechs will live and die on the basis of the user experience they provide.
If a startup can point to tangible results, investors will be more willing to invest in them.
What do you think it would look like in real life? Before you go to an investor meeting with your pitch deck, you should prepare for these questions.
There is only one way to find these answers, and that is to ship a working product that people can use. Everything you are building right now should be used to get anMVP out the door.
I don't mean to say, "build it and they will come." Too many tech companies shut down because they couldn't find a solution to their problems. Slowing yourself down is easy if you think too far ahead in terms of what you need to do.
Do you really need a payments processor for your startup? It would take 10 to 20 engineers, about 18 months and millions of dollars, to build something that would never see the light of day.
Eighteen months is a long time for a startup to get to market and it can take three months if not faster. According to the study, embedded finance transactions in the U.S. will increase to $7 trillion over the next four years.