Propel partner Jay Reinemann shares his advice for fintech entrepreneurs
Fintech founder- After the last financial crisis, many people lost trust in the institutions that had failed them. This helped give rise to the booming fintech scene today, according to Jay Reinemann, a partner at venture capital firm Propel: those who felt let down by the traditional financial industry started to look for different products and services.
Reinemann says a good fintech founder creates a business to solve a problem, not to make money. That could be preventing customers from being punished with fees when they go into overdraft, or finding a way to better inform them on the financial services they sign up for. “What makes a great founder is that they have found something that they’re super-passionate about, and it drives them to try to understand the problem better than anybody else, or to see it in a different light,” Reinemann says.
He looks for entrepreneurs who can identify where traditional business models have failed customers. Good fintech startups, he says, should give users an incentive to do the right thing in a way that benefits both the customer and the startup – by convincing people to save more money or get better insurance, for example. Building trust is imperative.
Finally, anyone looking to start a successful fintech company has to expect some risk, and must be patient. “Unfortunately, in financial services, as a startup you don’t necessarily know how well you’re doing until your customers have to start paying you back the loans,” he says.
Over the next few years, Reinemann predicts that fintech will revolutionise industry supply chains where paper processes are still being used, such as in the restaurant industry where orders are made manually.