A few years ago I started a company in Singapore that invests in infrastructure financial technology firms, so I talk to a lot of business people who are raising growth capital. Many of them are former bankers. If you’re a banker-turned-tech entrepreneur, a big part of your current job (and your future career success in fintech) revolves around finding the right investors and raising funds from them.
All fintech investors will ask you the standard questions: What’s your cash flow? How will you grow your team? What’s your business model? What’s your current cash burn? But while being able to answer these nitty-gritty queries is critical, you must also go beyond simply reeling off facts and figures to impress investors.
Here’s a (non-exhaustive) list of the more unconventional questions that I like to ask people running fintech firms in order to get a good sense of where to rank their companies. If you’ve already quit banking for fintech, or if you’re contemplating a career change, see whether you can answer them with conviction.
Do you have a number of a regulator in your mobile?
Fintech entrepreneurs must be close to the Monetary Authority of Singapore (or their local regulator) and ideally to numerous other government institutions as well. So show me that you chat to someone within the regulator frequently – ideally via multiple WhatsApp conversations – and have built solid relationships with them. It’s not enough to just have one ‘saying-hi’ meeting. To be fully aware of the latest regulatory changes and to help your firm get the appropriate licences, you must find a ‘champion’ internally at the regulator.
Do you have a Financial Times subscription?
Everyone selling financial technology needs to be aware of the global financial markets. How does a higher Fed interest rate impact Asian financial services? What does regulatory change in Europe and North America (MiFID II, Solvency II, Basel III, etc) mean for the ASEAN region? Every fintech entrepreneur needs to have deep insights into the macro and micro trends influencing their business. It’s actually more important to read the financial media than it is to read a site like TechCrunch.
How many suits or smart dresses do you have at home?
If you’re selling to financial institutions, you need to dress the part. B2B sales doesn't really work in hipster t-shirts and shorts, I can tell you. As an emerging fintech company, you’re competing with large tech vendors who have an army of trained, suited-and-booted sales staff. Financial institutions are used to a certain sales process and they will not change their approach because of a new five-person shop. Everyone who knows me from two years ago is probably smiling at this advice as I have changed my own dress code from linen to smart cotton shirts – I’ve learnt my lesson.
Which large conglomerate / family is backing you?
Southeast Asia is one of the regions worldwide where most of the economy – from real estate and logistics to media and financial services – is still run by large family conglomerates. It’s crucial for every emerging firm doing business here to have some kind of backing from an influential group. It can help you to scale faster, distribute products through more channels and secure strategic funding. This might be obvious for every ASEAN citizen, but fintech firms run by foreign nationals here might not be so aware of this fact. Doing business here requires building deep relationships – what I call ‘a very long flirt’.
Who are your close mentors?
I wouldn’t invest in a fintech founder who thinks they know it all. Having good mentors helps in every possible way. So I always ask about the mentor you turn to for candid feedback. Who believes in you and is therefore keen to give up their time to help you? Mentors can be family members, co-founders, shareholders, or external people you know professionally. No matter who they are, having a mentor increases your ability to steer your company through good and bad times by helping you stay humble and focused and by giving you both emotional support and business advice.
This isn’t a comprehensive list and I’m sure many more criteria could be added. Feel free to add your own thoughts in the comments box below.
Markus Gnirck is the managing director and co-founder of Singapore-based tryb Capital.
Photo by Zach Lucero on Unsplash