When Should I Hire an Executive Risk Advisor?

We get the question almost every week—from Series A founders, Heads of Lending at established fintechs, even board members. They’re usually questioning if they can wait: wait until they’ve raised more capital, collected more data, or even wait to see if they can stem a rising risk crisis themselves. An Executive Risk Advisor (ERA) is an investment, and our clients want to make it judiciously.

Well, the answer is straightforward. We’ll get into common hesitations and our advice below, but the gist is: bring on an ERA as soon as the risk decisions you're making could materially affect the future of your business.

If your first thought is “sure, I’d like one, but capital is too tight”, know that at Ensemblex, we’re flexible. We’ve structured deals that include equity, deferred payments, or staged scopes. From experience, we know that even a few hours a month can help start-ups avoid the biggest missteps and lay the foundation of an exceptional risk management program.

Costs aside, some founders hesitate to bring us in because they figure they should mature more first. Launch the product, see how it goes, and gather more data. Then, the logic goes, an ERA can help clean up what went wrong, set up the “advanced” parts of risk management, and they’ll have a trove of great data to use, too. This misses one of the fundamental points of an ERA. An experienced ERA has spent decades making mistakes and learning from them. You don’t have to make the same mistakes. Bringing in an ERA early on to avoid mistakes is usually a better investment than bringing them on later to course-correct.

What can an ERA help with in the early days? Hiring, for one. Ensuring infrastructure choices, which are a pain to change later on, will work at scale. Aligning marketing and product teams with your top-level risk goals. Raising your next round. Designing tests that maximize efficiency with your precious capital.

To illustrate, we once got called into a fintech that had launched six months prior. After six months of testing and collecting data, they figured their next step was a quantitative analysis to refine their product. After looking at the data, we advised them to pause originations. It was some of the worst lending performance we’d ever seen. Their test design was fundamentally flawed: wrong product-market fit, adverse selection, and models that were actively selecting the riskiest applicants. The wasted time and capital were significant and entirely avoidable.

In short...We hear fairly often, “I wish I’d hired you six months ago,” but not once, “I wish I’d waited longer to bring you in.”

If you're wondering whether Ensemblex is the right fit for your stage, let’s talk. We’ve worked with companies at every point in the journey, from zero to thousands of loans per day.