Leadership Structure in a FinTech Company
FinTech companies are one of the fastest growing companies globally. In the first half of 2021, the total funding globally reached $98 billion, signifying that the industry is on the rise. Many FinTech founders are motivated to build a successful and disruptive FinTech business. However, to build that successful FinTech company, it is crucial to have the right leadership structure within your company.The leadership structure, sometimes also known as the C-Suite executives (‘C’ representing Chief) are the cluster of people holding the highest positions of the FinTech company and they impact company-wide decisions. It also means that these roles come with lucrative compensation packages and equity pay out, depending on the company.
Some examples of common leadership roles include, but not limiting to are Chief Executive Officer (CEO), Chief Financial Officer (CFO), Chief Operating Officer (COO), Chief Revenue Officer (CRO) and more. These leadership roles work collaboratively to ensure that the company is operating towards its established plans and policies.
Company’s Goals and Leadership Structure at Each Funding Stage
In this article we will be breaking down the goals and ideal leadership structure of a FinTech company at each funding stage:
Company’s Goals at Pre-Seed
At the Pre-Seed funding stage, it is also commonly known as ‘bootstrapping’ which is meant by a situation where the entrepreneur launches the company with little capital, relying on only personal resources or operating revenue. Typically, at this stage, the company is still exploring the feasibility of the idea within the FinTech industry and conducting market testing while developing a marketing and sales plan for product launch.
Leadership Structure at Pre-Seed
In our recent whitepaper, every single FinTech firm has a CEO who is often their founder or co-founder in early stages. The CEO would be critical in helping the startup get their operations off the ground, building a viable product that would maximise the market opportunity while attracting investors. It is also common for the founder to take on the role of a CEO and a CTO if the founder has strong technical knowledge and expertise.
Company’s Goals at Seed
At Seed funding stage, the FinTech startup would focus on getting resources to determine its final product and demographics. It would be expecting to launch it products and building traction to help revenue grow. At Seed funding stage, a FinTech startup would also focus on recruiting and growing the team headcount that is critical to developing and launching the product. It would be developing the product to get it ready for the market.
Leadership Structure at Seed
The leadership structure at Seed funding stage would be similar to the Pre-Seed funding stage as startups are still lacking in resources. If the FinTech startup has enough budget, it is common to make the CTO hire in the initial stages as CTO are able to navigate the fluctuating technological landscape and setting up the necessary groundwork. About 35% of Seed-funded companies made its CTO hire.
Company’s Goals at Series A
At Series A funding stage, the FinTech firm should have a working product ready for the market with a stable business model. It would be focusing on further developing the product/services and tailoring it based on the market’s feedback. At this point, it would also be developing a scalable market blueprint and technology roadmap to the company’s goals.
Leadership Structure at Series A
Companies that have reached Series A funding will start to prioritize CTO and CPO hires as they are both roles that are focused on nurturing the software and product development stage. It is also observed that the leadership roles are gradually filled up with Chief Operating Officer (COO) and Chief Financial Officer (CFO) that are critical to managing the start-up’s operations as it scales.
Company’s Goals at Series B
At Series B funding stage, the company’s focus would be on growth and profitability. Its goals might shift towards meeting the different demands of their customers which they were not able to do so in earlier stages due to lack of funding and resources. Most FinTech companies would also be scaling up and increasing its market share while building quality teams and leaders that can help them do so. At Series B, companies would typically be ‘fighting’ with their competitors and ‘outliving’ them in the market.
Leadership Structure at Series B
With the main focus being growth and profitability at Series B funding stage, COO would play a complementary role to the CEO by assisting in the supervisory responsibility and take some responsibilities off the CEO. Chief Revenue Officer would also be a crucial hire when managing profitability as it helps the various functions of the company to stay aligned and maximise profitability in its operating activities.
Company’s Goals at Series C
At Series C funding stage, companies would be attempting to secure more funding that will be critical in helping them to build new products, scale into new markets and acquisitions of startups. Some companies at Series C would be gearing up towards the IPO stage. Profitability and revenue growth would be of high importance at this funding stage as it would be a clear indicator for investors if the company is stable and ready for further growth.
Leadership Structure at Series C
As the company scale and dive into new markets, brand awareness plays an important factor to the success of the company. Marketing will become a much more valued function as companies seek to hire Chief Marketing Officer (CMO) to oversee marketing and branding operations. Although Chief Risk Officer (CRISK) is not a common leadership role in younger startups, it is observed that along with expansion plans, the percentage for CRISK hires spiked up significantly in Series C-funded companies. This is expected as companies establish their operations in different geographical locations that have different rules and regulations, CRISK will be able to help the FinTech company to prepare for any potential risk or comply to the governing rules.
Company’s Goals at Series D+
At Series D and beyond funding stages, some companies might be getting ready for IPO, or if they do not see a need to reach this stage, some companies go into further funding stages to help raise funds for special situations like merger or to achieve a certain growth goal which they have yet to achieve at their Series C funding stage. However, if a company has reached this funding stage, they would have positive market sentiments and a proven track record of an operating success.
Leadership Structure at Series D+
Companies at Series D and beyond funding stages would have their leadership roles filled up and well-established to ensure that their functions have a clear line of reporting, and it also would benefit the FinTech company in working collaboratively. It is also noted that it is common to have the same leadership roles in different operating geographical location of the company. By hiring a leadership role based in the operating country, it is beneficial in scaling quickly in that market as it is equipped with the relevant local market knowledge and skillsets.
How We Can Help
We know how challenging and confusing it can be for FinTech startups when it comes to hiring leadership roles that are critical to leading your company to success. Hiring in the competitive FinTech job market in one of the most rapid growing industries globally is a struggle, even for huge FinTech brands. We know time is paramount for startups. This is why at Storm2, we aim to deliver with quality and speed. If you’re an emerging startup looking to make your next leadership or senior hire, contact us now to find out more!