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How to Secure Funding for a Fintech Startup and Not Lose Everything


9 min read

Nowadays, there are a plethora of options on how to launch a fintech startup and supply it not only with a starting capital but also long-term financial support. Getting six-figure funding for a worthy project is a goal descended from the seventh heaven to a more down-to-earth realm. Now you don’t need to work with your head in the clouds anymore! The recipe is relatively simple. Let a good feasible idea occur to your mind, gather a couple of like-minded people around it, seek a venture capitalist, angel investor, or any other concerned party like, say, a crowdfunding platform, and all systems go!

The present-day fintech industry is undoubtedly flooded with raw startups that never end up becoming successful. But your project has everything to avoid this fate, given a reasonable amount of financial support. Astonishingly enough, 38% of startups in 2021 fail due to the inability to raise new capital, while other most common reasons include no market need (35%), high competition (20%), and flawed business models (19%).

In Europe, the most highly valued unicorn has become a London-based payment provider, with $15bn behind their back. Whether you choose a business angel investor or a crowdfunding platform, the goal remains the same — secure funding and start breathing life into your dream! In 2019, more than 800 UK-based organisations were funded by angel investors operating in respective networks.

Moreover, in case your startup may bring potential profit for the government, you can seek assistance from related authorities. For instance, according to Finextra, the UK has become a leading fintech hub for those who seek SME financing, loans, and other types of support. Fintech startup marketing can be the next stage of scaling up your business. Yet first, you’ll need to elicit financial support from an investor, government, or crowd.

What Is a Fintech Startup, and Where to Look for Capital?

Fintech startups drive the modern banking industry, right? If so, anyone with a breakthrough (or not) idea can join this global sowing season. What you require is… startup capital. But where to look for gold mines? Fintech startup funding is a complex, multidimensional issue, yet today it doesn’t really matter what type of project you’re intending to launch. Fundamentally, what truly matters is included in the list below:

  1. Feasibility;
  2. Demand;
  3. Proper audience;
  4. Reliable funding source;
  5. Sustainable business model;
  6. Clearly established goals;
  7. Networking;
  8. Attractive market-oriented startup idea.

As soon as you’ve got these points checked, it’s about time to examine a few options to ensure a startup capital:

  • Bank loans. It’s one of the most widely spread funding sources for small and medium businesses. Many banks offer unique startup financing options for entrepreneurs, so feel free to check out whether your local or digital bank has something in store for you.
  • Personal investment. This option may be suitable for beginner entrepreneurs whose startup capital isn’t large enough and worthy of emptying their pockets. You’ll still need a more long-term funding opportunity when your personal account runs out of money.
  • Venture capital. When it comes to launching a fintech company in its startup stage, VC may prove the best option. However, be cautious, inasmuch as venture capitalists seek tech-driven organisations with cutting-edge solutions as well as vast growth potential. These investors take an equity position in your venture, thereby helping it undergo risky development phases. Always keep in mind that venture capitalists expect a reasonable return on investment when your startup child grows into a self-sufficient person with stable sales rates.
  • Angel investment. In fact, parties involved in this investing type make up the bulk of affluent demographic groups or retired executives willing to invest in new-fledged companies. Unlike venture capitalists, who serve as employees of risk capital firms, angel investors put at stake their own money.
  • Subsidies or government grants. Provided that your idea brings benefit for society and official authorities, your startup idea can be funded by policymakers.
  • Business incubators. Be ready to share your assets and premises if you choose this option since such ‘accelerators’ ensure support for new high-tech businesses to reap their harvest in the long run. Examples of organisations receiving this type of funding are multimedia, biotechnology, and IT companies. But it’s better safe than sorry.
  • Crowdfunding. You can always ask for financial support from your potential target audience via a Kickstarter campaign or on other related platforms. More on that later!

What option is best for funding your business? Read on to get more insight and prepare yourself for a long journey around funding sources!

How to Secure Business Funding: Most Common Funding Types in Fintech

Fundraising has become a buzzword in the era of digitalisation. Apart from the funding sources discussed above, the most internationally used approaches to attract investment include equity and debt funding as well as friends-family investors. In the pre-seed round, entrepreneurs usually risk their own finances or accept money from friends and family. Most often, this capital value varies between $10k and $500k, depending on a startup scale. Nevertheless, when angel or seed investors are successfully pitched and attracted, your business may earn millions only because some interested parties want it afloat, expecting a considerable return.

In turn, equity funding is an umbrella term that encompasses the means and ways of getting your startup financed. Seed financing usually refers to sufficiently small amounts of funds raised from friends, family, and personal investors to stir a startup. In the context of equity funding, experts usually distinguish between Series A, B, and C rounds.

Thus, the first round of stock implies gathering funds for the early development stage. During this phase, your business may raise up to $15m and attract angel investors or VC organisations. Your company enters a second round when it proves its viability to raise more funds as well as elicit support from experienced venture capital firms that can offer not only money but networks, mentorship, etc. Finally, Series C is the third round, which, by the way, can be continued in alphabetical order: C, D, E… Here your company gathers additional funding to meet previously established goals from private equity investors or VCs.

In a nutshell, debt funding can be another option. It presupposes borrowing cash to be then paid back, irrespective of whether your startup proves successful. A risky undertaking, huh? The most common types of debt financing include asset loans, SBA loans, and venture debt. Yet these should be examined carefully. You don’t want to get bankrupt long before your startup begins to bring profit, don’t you?

Why Startups Fail?

Startup fintech companies, just like other tech organisations out there, rely on innovative ideas that are about to improve some services or offer an entirely new one. But why do many of them fail? According to Harvard Business Review, bad companions, poor market and competitor research, as well as the lack of funding constitute the most frequent reasons why startups fail. Another research by CB Insights informs that new companies tend to fail due to disharmony among team/investors, burnouts, lack of passion, poorly developed or mistimed products, and pricing issues. Raising pre-seed funding can become a real challenge for startups as they spread their wings, so the highest percentage of them face the end before securing enough funding. Despite a high risk of failure, the future of fintech (the same concerns other tech industries) still rests on the trembling shoulders of newly fledged startups that have innovation but lack money to give their ideas a try.

List of Platforms for Getting Crowdfunded


If you haven’t heard about this crowdfunding platform, chances are you’re right now building a colony on Mars. A friendly reminder — Kickstarter asks for 5% of the total funds you raise within its domains. In exchange, it provides a global reward-based platform for any kind of activity and audience. If you’re a musician, game developer, or fintech startup, you can pitch your product to Kickstarter’s audience for them to decide whether it’s worthy of funding or not. What you need for starters involves an email list, your product’s demo, a trailer shedding light on the product (optional), and a project page. For example, the most successful Kickstarter campaigns in history included Pebble Time (2015), an innovative smartwatch that raised $20m on crowdfunding, and Frosthaven, a dungeon crawling game whose campaign hit almost $13m in 2020.


This American crowdfunding platform was launched in 2008. It assembles investors, donors, and other parties eager to provide financial assistance for startup projects of different kinds. Back into the end of the 2000s, Indiegogo pioneered the crowdfunding system on a par with Kickstarter. Just like the latter, it helps raise money for entrepreneurs interested in various business areas, from finance to art. The only thing that genuinely matters is the product itself. Interestingly, Indiegogo won’t give you any money if your preliminarily established funding goal wasn’t reached, so the system is the same as on Kickstarter. Still, there’s an alternative option if you go with flexible funding goals. BodyBoss is an example of a startup whose campaign was launched on Kickstarter but ended up raising funds on Indiegogo. So you don’t need to limit yourself to only one solution.

SeedInvest Technology

Founded in 2012, this equity crowdfunding platform allows startups to meet their investors online. In other words, SeedInvest ensures liquidity by attracting VC organisations and affluent investors. According to The Wall Street Journal, the company raised much of its $4.15m during the Series A funding round in 2014, with a primary investment source being Scout Ventures as well as angel investors. By the way, SeedInvest is considered the largest crowdfunding platform in the US market. Similar websites undoubtedly bring the prospects of investment closer to communities, thereby democratising the phenomenon as such.


Serving as a bridge between investors and potentially prominent startups, this crowdfunding website has a 3.5% transaction fee, which is slightly higher than the amount required by their competitors. In addition, StartEngine burdens you with another 5% fee for selling shares. In return, the platform offers investment opportunities starting from $100 and sufficient room to launch a fundraising campaign, not to mention that entrepreneurs may raise up to $75m on an annual basis. Launched in 2014, StartEngine has become a crowdfunding source equally beneficial to both entrepreneurs seeking financial support for their startups and investors who may get a chance to secure a reasonable return in the long run.


If you’ve always dreamed of becoming an angel investor, and there’s £5,000 in your online pocket, sign up to SyndicateRoom to invest in UK-based startups. Initially, this company began as an equity crowdfunding platform but later turned into a venture capital fund. Today SyndicateRoom has significantly changed its approach to investment, but if your company is based in the UK and it has growth potential, they may invest in it, just like it was with a laundry startup Oxwash. A UK-based startup wanted to make laundry chores more eco-friendly, so SyndicateRoom proposed a $1.7m assistance, and that ain’t hay.

Startup Accelerators and Incubators to Scale Your Business

Unlike crowdfunding platforms, accelerator programs are what the doctor ordered when it’s time to develop even further. As a free Leipzig-based startup accelerator program, Spinlab may become a noteworthy opportunity for startups that have already received some funding but wouldn’t turn down an offer to scale up. As a European organisation, your startup can earn up to €15,000 in free funding. Some curious facts about Spinlab: 83% survival rate and 86 startups supported since 2015 — a promising result, isn’t it? Another option for startups is Launch Academy, a tech incubator for founders willing to upgrade their dawning companies.

Regarding the number of exits performed by startups after finishing accelerator programs in the US in 2021, the statistics are headed by Y Combinator, with 351 successful cases. Then go Techstars and 500 Startups — 303 as well as 282 exits, respectively. Business accelerators and incubators don’t guarantee inspiring results but they’re likely to give your startup a purposeful impetus to keep moving forward.

An Innovative Startup Idea Is Larger than Funding

Feeling snowed under the number of fundraising opportunities for your startup? Don’t make haste, take your time, and look around a few of them. Say, you’d like to apply for crowdfunding and try yourself in searching for a reliable angel investor or venture capitalist. Then go ahead since there’s no need to stop your gaze at only one option!

To maximise your chances of sheer success and get rid of uncertainty popping up before each step, verbalise your ideas by contacting DashDevs. What you’ll get is quality consultation and assistance with software product development without a modicum of stress!

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