To build a successful FinTech, it is essential to form the ideal management and team structure. According to a research by Embroker, about 90% of startups fail and 10% fail within the first year. With 23% of startups citing team issues that led to failure. Soft skills such as ‘entrepreneurial passion’ and ‘strong strategic vision’ are important to lead the team to success. Silent killers for startups are team inconsistencies and misalignment. Thus, when you plan for success for your startup, you should also be planning on hiring the right people and functions.
The short answer to the question of ‘is there an ideal team structure in a startup’ is that there isn’t a right or wrong way of doing it. It is dependent on your startup’s priorities that drives the hiring needs.
C-Suite roles are positions that help to lead your startup to success. A good way to build a strong startup starts with hiring C-Suite roles. However, hiring C-Suite roles can be confusing and difficult to start. A good way to get started is to answer the following questions before you hire:
C-Suite Roles in a Startup
When building your startup, your team structure should be clearly outlined for each department and professionals to take ownership of their own roles and responsibilities. In most startups, the CEO role is generally taken up by the founder. FinTech startups are led by a group of C-Suite professionals and they help to play a fundamental role in setting the vision and order. The common C-Suite roles in FinTech startups are:
What Funding Stage Are You At Right Now?
At Pre-Seed Stage
At Pre-Seed stage, your startup is probably in the process of build a minimally viable product to be put out to the market. At this stage, you would be thinking about making your first few hires. However, depending on your product, your expenses will be starting to grow. For startups at this stage, cost should be your main concern. You might not be able to hire C-Suite roles due to budget constraints, hence your first few hires would be mainly in Engineering or Operational function to get your product up.
At Seed Stage
At Seed stage, your product would have grown some interest and traction in the market. You will be scaling your product and startup to be ready for the market as you are well beyond the prototype. At this stage, budget would still likely be a factor in most of your decisions. However, to ready your product for the market, it is ideal to invest your hiring efforts in Engineering and Product team as they would be most likely to be able to improve your product. At this point, it would be ideal for startups to make their very first C-Suite hire – a Chief Technology Officer (CTO). A CTO would be able to be able to navigate the technological challenges that your product might potentially face.
At Seed stage, other functions like Marketing, Finance and Operations take a back seat. At times, we noted that startups outsource these functions for cost savings purposes.
At Series A
If you had not made your first CTO hire at Seed stage, most companies would have hired a CTO by Series A fundraise. A CTO is perfect due to the nature of the FinTech industry. At Series A, you would be scaling your companies with the goal to reach certain milestone in product development and attracting new talents into the company.
Series A is normally an exciting phase for startups as they are beginning to value the importance of other functions and will be able to bring in their operations if they had outsourced them initially. At Series A, functions like Product, Sales and Finance will start to be filled up and form a much more independent function on their own to fulfill the startup’s strategic vision. Engineering function being the most important function in the initial stages will still be expanding but at a slower pace as compared to Product team as they become two distinct functions in the company. At Series A, startups will make other C-Suite hires like CPO and CFO to set the tone for the company and to distinguish both functions.
At Series B
At Series B, startups would have achieved several milestones, and they are well past the initial startup stage. The focus for Series B companies would be to support the company’s growth to the next level. These can include expanding the team, developing new technologies or tapping onto new market opportunities. When progressing into a Series B company, you will be expecting to meet increased demand. Depending on your focus, you will have to expand your headcount on critical areas like Marketing, Engineering, Product, Sales and Support to help scale your business. This would mean the hire of other C-Suite roles that was not previously invested in before. C-Suite hires like CROs, CMOs, CCOs and COOs will be made at this funding stage.
At Series C
At Series C, you might be considering stepping onto the journey of becoming a listed company and getting high valuations for your company. At this point, your company can be considered relatively successful and established, the hires you would be making at this point would be to ensure you are bringing the best talents across your functions to optimize your operations. You would also notice that your C-Suite matrix is relatively filled up with mature, experience industry professionals skilled to scale your company.
At Series D+
Companies at Series D+ might hope to stay private a little longer, and according to our recent whitepaper research, a Series D+ Payments company typically have about 400 engineers and developers globally. Engineering team take precedence. At Series D+, C-Suite roles would have been fully filled and global businesses can have multiple C-Suite roles depending on locations.
What Is Your Current Priority?
At different funding stages, you will notice that you have different priorities and hiring needs. Every company is unique, as it can vary depending on subsectors and growth plans.
If you are currently in the seed/pre-seed funding stage, you will find yourself prioritizing the hires of Engineering or Product function as they are critical in your plans moving forward. Budget will be a huge concern; hence you might want to find someone who has the technical experience that your company needs and fits your budget.
If you are currently in Series B or later, your product would have been finalized and your priorities would have shifted to expanding globally. In this case, you will be prioritize recruiting matured C-Suite hires as they are fundamental to taking your company to the next level.
What Are Your Long-Term Growth Plans?
Besides looking at your current priorities and needs, you will have to be far-sighted in your hire, especially for C-Suite roles as you should expect them to lead your company to success. You should ensure that the FinTech talent have the capability to scale with your company, have the leadership skills to lead a team as your headcount increases, and their adaptability to the ever-changing FinTech landscape.
Best Practices in Startup Recruitment
Using the above as a guideline to start your recruitment process, it is important to note that for startups, certain functions might overlap initially. For example, in newer companies, a CTO might take on multiple roles within the technical team. In certain startups, marketing and sales is an overlapping function at initial stages. Some startups prefer to outsource certain functions to save cost. For example, we noticed a trend in smaller firms to outsource their financial operations to an agency rather than hiring an internal accountant or Chief Financial Officer to oversee them.
You will find that as your startup scale, your functions become much clearly defined. Your ideal team structure should be dependent on your company’s growth plans at that point of time, and it can change as time passes or as you secure more fundings.
Specialized Recruitment for Specialized Needs
Every FinTech firm is different in its own way, with different hiring needs and emphasis. At Storm2, we understand how important it is to make the right hire. A specialized recruitment agency helps to stay on a lookout for seasoned candidates that have a strong potential to lead your company to success. As a FinTech company, you might not always understand the position that you are hiring for as the market is always changing. With our specialized consultants that recruits for one vertical, we are equipped to identify the candidate that is perfect for your company’s goals and success.
Get in touch to find out more. We have a strong network of highly skilled FinTech professionals that will be able to help you achieve that.
