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Planning Your Own Funeral: Why FinTech Firms Must Prepare for the Worst

ContingencyFintechInsolvencyStartupBankrupt
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Sean Troy   August 10, 2016

As humans, we are programmed to “hope for the best but plan for the worst,” a philosophy that is often evident in actions we take throughout our lives. Working professionals, even those with healthy incomes, set up savings accounts to create a financial safeguard against loss of employment. Midwestern families build underground shelters to protect their families from tornadoes. Parents purchase cars with built-in airbags, so that their children are protected in case the unthinkable happens. We plan for the worst not to buy a license to act recklessly, but rather to take care of those who depend on us during extreme times.

 

It is just as important for companies to take similar measures to protect against unfortunate, yet entirely conceivable disasters. This planning is especially crucial for startups. As Forbes has kindly reminded its readers, 90% of startups fail. One of its advised conditions for creating a successful startup: design a product that is “perfect for the market”. Certainly no easy task. What happens in the end if a product isn’t quite…perfect? What happens if that 90% becomes 100%? All of a sudden, customers who had depended on the company’s services would be left without a safety net.

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