Not all tech startups are solely in it for the money. Many young Founders, who are self-aware of the privilege and opportunities they have benefited from, are guided by a sense of purpose to bring opportunities to other less fortunate people/communities.
In the fintech category specifically, whether it's reaching the underbanked across North America or reaching the unbanked in developing countries, there is a fintech solving for that!
Understanding the difference between the Unbanked and Underbanked
The best definition we found came from the US Congress: an “unbanked” person is someone that does not have a bank account with an insured institution, while the term “underbanked” means that the person has a bank account with an insured institution, but regularly uses alternative financial services (payday loans, etc.).
How big is the global community of Unbanked and Underbanked?
Big, although the gap is closing thanks in part to the pandemic. According to the World Bank's 2021 Findex Database, 29% of people in developing countries lack ownership of a bank account; however, the pandemic increased the adoption of digital financial services in developing countries.
It should come as no surprise that Bill Gates is working on this through the Gates Foundation. These are the notes he has shared publicly highlighting the opportunity and the work being done to bank the unbanked – it's inspiring. The mission to serve these communities also inspired Techstars, who selected Financial Inclusion as their Fintech Challenge for 2021.
Recruiting talent for these mission-driven fintechs:
Our firm recently had the opportunity to recruit a founding leadership team for a fintech startup whose mission is to help build and protect wealth for people in underserved markets.
While recruiting on those searches, these are two lessons we learned that mission-driven fintech startups might find helpful:
1. Nail the Story of the User Persona and Use Case
Our experience has taught us that startup stakeholders building mission or purposeful businesses need to be mindful to reinforce the value a new hire will bring to the user persona and the use case the company intends to deliver value on.
While this should seem fairly obvious, when companies grow, the founding team typically stops interviewing during the first or second rounds or sometimes even altogether. Functional leaders replace them with business problems they are hiring for, i.e.:
- A VP of Sales may prioritize understanding quota attainment
- A VP of Product may prioritize understanding product outcomes and the lessons a PM learned that drove product adoption
- A VP of Marketing may prioritize understanding tech stacks and the funnel of MQL to SQL conversions
Yet, whatever the hire or stage of the interview, a stakeholder needs to take the time to express how this role will become part of the story that contributes to the company's mission.
Candidates will be more likely to accept an offer when they understand enough to get behind your mission and when they experience the message from every person they meet in the interview process.
For the cynic who may question whether the 'mission' is genuinely or just marketing speak– win them by nailing the story of the company's beginnings, the user persona for whom you are making a difference, and the use case of how you are doing that.
2. Be Ready for the Money Talk
While some candidates we have represented have expressed compensation flexibility for the opportunity to work on something that has a greater good - many don’t. More often than not, candidates place a premium on their experiences (and how those experiences could accelerate the objectives of a mission-based company) and are, therefore, not as flexible on total compensation.
Depending on the scope and scale of the role, it is best to first figure out which opportunities to invest in more heavily in order to have competitive offers and retain the best talent vs. those roles where you can find someone with passion and drive that can scale while in the role.
When hiring for a missional-led fintech, it is critical to nail down your purpose, value, and company story to attract the best talent in this category.
Looking for more fintech hiring content? Check out our blog.