Tech entrepreneur Michael Adeyemi has cautioned that venture capital, often regarded as a driver of startup expansion, may be detrimental to the long-term success of fintech companies. Speaking during a presentation titled ‘Your Venture Capital Might Be Killing Your Fintech’, Adeyemi argued that overdependence on external funding could distort business priorities and weaken the fundamentals required for sustainability.
Historical Parallel and Fintech Failure Rates
Drawing a historical parallel, Adeyemi cited a quote attributed to Alexander the Great, who reportedly said he was “put to death by the help of too many physicians,” suggesting that excessive intervention could sometimes produce unintended consequences. His remarks came amid rising failure rates within the fintech sector. He noted that approximately 73 per cent of fintech startups collapse within their first three years, reflecting broader challenges faced by small businesses, particularly in emerging markets.
Fintech as a Business, Not Just Technology
Adeyemi stressed that, despite its technological appeal, fintech remained fundamentally a business and not insulated from traditional enterprise challenges such as regulatory pressures, operational demands and effective resource management. According to him, many founders enter the industry with ambitious, capital-intensive strategies but fail to validate their ideas on a smaller scale. He observed that the principle of developing a minimum viable product is often overlooked, while access to substantial funding can encourage premature expansion and weaken financial discipline.
Local Adaptation and Skills Gap
Adeyemi, who is also the founder of Depth Technologies Limited, highlighted the risks of adopting foreign business models without adapting them to local realities. While startups in Western economies may benefit from relatively stable regulatory environments, African entrepreneurs frequently contend with more complex and unpredictable systems, which can strain both time and capital. He further identified a persistent skills gap among founders, noting that success in fintech required a combination of technical expertise and sound business acumen—an intersection that remains relatively rare but essential.
Recommendations for Sustainable Growth
To mitigate these challenges, Adeyemi urged founders to prioritise mentorship, particularly in business operations, and to gain practical experience in sales and operations, which he described as the backbone of any successful enterprise. He also cautioned against aggressive scaling, advising startups to expand in line with their operational capacity. Cost management, he added, remained critical regardless of funding levels, urging that entrepreneurs must continually seek more efficient ways to execute their ideas.
Differentiation and Long-Term Vision
In an increasingly competitive market, Adeyemi warned against replicating existing solutions without a clear competitive advantage, emphasising the importance of strong and differentiated value propositions. He concluded by framing entrepreneurship as a long-term journey rather than a quick route to success, calling on founders to remain disciplined and focused on building resilient businesses. His remarks add to the growing debate within the technology ecosystem over whether venture capital, while essential, may at times contribute to the very failures it is intended to prevent.
