Although the fintech field is very promising, investors should remember that early-stage ventures might be very fragile. In this sense, they should choose wisely the projects that meet certain criteria. I will discuss the main points in this article.

Business model sustainability

First, investors take into account how sustainable the business is. ESG is not greenwashing – without sustainability, there is no economic development. When choosing a startup, investors should look for one with a clear and sustainable business model that shows long-term viability.

The project that is good for investments has a stable foundation. It has to be able to survive in the environment of shifts and changes. A good fintech startup should also be focused on profitability; otherwise, it would not be interesting for stakeholders.

Scalability potential and adaptability

A startup must be able to grow and expand, not just stay afloat. Investors are attracted to ventures that can scale not only within the domestic area but also across different regions. This will attract investors from both home countries and global markets. Global expansion readiness is crucial for fintech startups looking to attract large investments.

To be in good relations with investors from other countries, early-stage ventures should demonstrate an ability to adapt services globally. When a startup is able to adjust and realign with different markets, investor confidence increases.

Regulatory compliance

Everyone wants to be a law-abiding citizen, and so do the investors. That’s why they need assurance that fintech startups follow the laws of the regions in which they operate. I would even say that a startup's ability to manage compliance in regions with strict financial regulations is a key factor. Investors need a guarantee that startups are not ignorant and have a deep understanding of the local regulatory framework.

They should also not forget about cultural differences. While formally, they may conduct the business correctly, on a cultural level, there might be misunderstandings. Startups should be careful and make sure that they obey informal rules as well.

Growth prospect in fintech technologies

Speaking about fintech in particular, investors are especially interested in startups utilising blockchain and cryptocurrency solutions. From my experience, early-stage ventures that develop their products based on emerging technologies have more opportunities to achieve tangible results.

For crypto companies, there is also a great opportunity to, for example, facilitate payments on the international level and make cross-border transactions easier. They also can help bridge the gap between fiat and crypto and provide faster and cheaper ways to settle cross-border transactions.

Besides crypto, investors are also very interested in companies that offer innovative solutions. The world does not stand in one place, and startups should do the same. Startups that address real-world financial problems have significant growth potential and a big appeal among investors.

Conclusion

All in all, the main characteristics of a decent project for investments are business model sustainability, scalability potential, regulatory compliance, and growth prospects in emerging fintech technologies. Investors should be able to identify startups that can be characterised by these criteria. If so, they can increase the chance of supporting successful and impactful fintech ventures that can thrive into a full-fledged business in the end.

Startups can also take note of these criteria. Following them, they will be able to find funding anyway. And if their founders and teams use them for the right purposes, then there is always an opportunity to stop being a startup and become a stable company.

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