Nowadays, many fintech start-up companies are facing the risk of failure. These companies normally are unable to achieve the scale that needed to sustain their operations in the current market. 

  1. Lack Of Funding

Not enough funds can be the killer to a fintech startup company. It can strike the company heavily which is quicker than the company expected. If the company is making enough money for its operation, it wouldn’t be underfunded. 

  1. Selecting The Wrong Venture Capital (VCs)

It is important for a fintech startup company to select VCs wisely. Selecting the VCs which are full of experience as well as an understanding space can help them to reduce the risk of failure. 

  1. Thinking That Fintech Startup Company Is Same As Other Startup Company

A fintech startup company should understand the psychological behaviors of individuals’ credit, savings, money and payments. Individuals will not have the same thought about their money as the regulators and banks do. 

  1. Competing Solely Based On Cost

Providing products or services at a lower price can be very attractive to customers. Yet, these fintech startup companies always miss out on the fact that banks are actually having larger scale advantages than them. 

In conclusion, not making enough money can be a symptom of failure but not exactly the cause. There are also some fintech startup companies that succeed by getting acquired by any financial institution or an established vendor who can help them to grow.

Written by Javene Liau

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