Michael Adeyemi, Tech entrepreneur founder of Depth Technologies Limited, has cautioned that venture capital, while widely viewed as a catalyst for startup expansion, can in some cases undermine the long-term success of fintech companies.
Speaking at a presentation titled _“Your Venture Capital Might Be Killing Your Fintech,”_ Adeyemi argued that overreliance on external funding often distorts business priorities and erodes the fundamentals needed for sustainable growth.
“Excessive intervention can sometimes produce unintended consequences,” Adeyemi said, drawing a historical parallel to a quote attributed to Alexander the Great, who reportedly said he was “put to death by the help of too many physicians.”
Rising Failure Rates Highlight Structural Challenges
Adeyemi’s remarks come amid increasing failure rates within the fintech sector. He noted that approximately 73% of fintech startups collapse within their first three years, a trend that reflects broader challenges faced by small businesses in emerging markets.
He emphasized that despite its technological appeal, fintech remains fundamentally a business and is not exempt from traditional enterprise challenges such as regulatory pressures, operational demands, and resource management.
Key Risks Identified: Premature Scaling, Skills Gap, and Model Misalignment
According to Adeyemi, many founders enter the industry with ambitious, capital-intensive strategies without first validating their ideas at a smaller scale. He observed that the principle of developing a minimum viable product is often overlooked, while access to significant funding can encourage premature expansion and weaken financial discipline.
He also highlighted the risks of adopting foreign business models without adapting them to local realities. While startups in Western economies often operate in relatively stable regulatory environments, African entrepreneurs frequently face more complex and unpredictable systems that can strain both time and capital.
Adeyemi further identified a persistent skills gap among founders, noting that success in fintech requires a combination of technical expertise and sound business acumen—an intersection that remains rare but essential.
Call for Disciplined Growth and Mentorship
To address these challenges, Adeyemi urged founders to prioritize mentorship, particularly in business operations, and to gain hands-on experience in sales and operations, which he described as the backbone of any successful enterprise.
He cautioned against aggressive scaling, advising startups to expand in line with their operational capacity. Cost management, he added, remains critical regardless of funding levels, and entrepreneurs must continually seek more efficient ways to execute their ideas.
In an increasingly competitive market, Adeyemi warned against replicating existing solutions without a clear competitive advantage, stressing the importance of strong and differentiated value propositions.
A Long-Term View on Entrepreneurship
Concluding his remarks, Adeyemi framed entrepreneurship as a long-term journey rather than a quick route to success. He called on founders to remain disciplined and focused on building resilient businesses.
His comments contribute 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.
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