Strategist, UX Designer
Sketch, Illustrator, InVision
The Securities and Exchange Commission (SEC) passed Title III of the JOBS Act which allows companies to offer and sell securities through crowdfunding. Prior to this approval, only accredited investors had the ability to participate in equity crowdfunding. Now, anyone can invest and gain equity in small businesses with little restriction. This is great news not only for investors but for companies that have limited access to professional investors.
My teammates and I were given the challenge to create an online crowdfunding platform through which anyone can participate in equity crowdfunding and support startups and entrepreneurs.
- Determine the user groups that would utilize an equity crowdfunding platform.
- Understand goals and pain points of entrepreneurs and small-time investors.
- Evaluate the current crowdfunding market to gain insight on successful strategies.
- Research plan
- Competitor and domain research
- User interviews and testing
- Concept validation
- Site map
Since the passing of this law was recent, we began by gaining as much knowledge about equity crowdfunding and the accompanying rules. We discovered that there were a lot of guidelines that we would need to keep in mind as we progressed through the creation process.
Domain Research - Key Takeaways
- Startups struggle to secure funding - much of this has to do with the limited resources and risk tolerances of angel investors and venture capitalists.
- Non-accredited investors who earn less than $100,000 per year or have less than $100,000 in net worth can invest up to the lesser of $5,000 or 5% of their annual income or net worth.
- Those with annual earnings or net worth between $100,000 and $200,000 can invest the lesser of $10,000 or 10% of their annual income.
- The ability to cancel an investment via equity crowdfunding is limited.
- Investors are restricted from reselling their shares for the first year, unless the shares transferred to or in connection with the company, a family member, accredited investor, or the other parties listed in the SEC guidelines.
- An early-stage company is only obligated to file information annually regarding its business, including financial statements.
Many crowdfunding platforms exist today, some that are rewards based and others that are equity based. However, we found there were opportunities in the gamification space as well as a platform that caters to unaccredited investors that allows them to participate in equity crowdfunding.
In order to gain a better understanding on what users feel and know about equity crowdfunding, we interviewed 3 startup founders, 3 venture capitalists, and 4 investors. Based on the interviews and a survey, we created an affinity diagram to organize what we learned and to determine user priorities and pain points.
Novice investors were frustrated by traditional investing but were interested in diversifying their investment portfolios.
Interviewees expressed interest in being a “part of something bigger”.
Investors were intrigued by the idea of being able to gain equity in a company but stated they would need more education on the process.
Startups were excited by the opportunity with one stating “I think almost unequivocally 99%, it’s a good deal for founders and it’s smart”.
Two user personas were developed: one investor and one startup founder. Our primary persona, Lola Martin, is interested in investing but doesn’t have much knowledge on the logistics of investing. Our second persona, Mason Alvarez, is an entrepreneur who lacks access to investors and is looking for new ways to secure funding to move his business forward.
The Interested Investor: Lola has limited knowledge and experience with traditional investing, but would like to get involved. She contributes to a 401k, and has supported a friend’s startup. She visits tech sites daily to keep abreast on new and innovative ventures in which she could potentially invest. She is more concerned with getting transparent information about the startup than a quick rate of return. Lola understands equity funding is risky but is intrigued with the idea of crowdfunding.
Motivated/Creative Entrepreneur: Mason is an internet savvy guy who has some familiarity with Kickstarter and other crowdfunding platforms. He has come up with what he considers an innovative idea and is in the early stages of product development and testing. He began his startup through bootstrapping and is on the verge of running out of funding. In the past, he found fundraising to a be a difficult process, often getting denied by investors. He is interested in equity crowdfunding but is concerned about his company information getting into the hands of the wrong people, the increased chance of fraudulent investors and the lack of success of many crowdfunding campaigns.
After much examination, the team decided to focus our energies on the investors with the aim of building upon the entrepreneur side in the future. From our competitive analysis and research, we felt there was more opportunity in this space and developed the following problem statement:
Novice investors are CONFUSED and INTIMIDATED by the startup investment process, often preventing them from actually investing, but have the MONEY and WILLINGNESS to support companies they believe have potential.
Minimal - The visual aesthetic should be clean and understated to encourage participation and honest transparent communication and transactions.
Social/Community - Users should feel a sense of community as they engage with the platform. As the users progress through their activity, the platform should assist in fostering feelings of shared responsibility around their investments.
Welcoming - The platform must avoid being intimidating or confusing, eliminating any anxieties that are part of entering a traditionally complex sector. Users should feel confident in exploring the platform further.
Transparent - Government rules must be respected and upheld at all times. Concurrently, users should find information to be clear, consistent, and easily accessible.
Excitement - The platform must be fun and bring about feelings of excitement. It should be personal and draw the users in to the experience.
Given that there are currently no other United States based equity crowdfunding websites for non-accredited investors, the sky was the limit. While this was exciting, it resulted in the team having a challenging time narrowing down the scope. To solve this, we created a general outline of a site map and began by sketching platform concepts on our own. We then came back together for rounds of critique and discussion, completing this process several times until we decided on two different approaches.
We broke into teams of two to quickly produce both concepts; each with a final, mid-fidelity wireframe that included at least one complete, testable flow. One concept focused on gamifying the experience to encourage users to return more often the website and the other developed a more social feature including in-person and virtual meetups and the ability to communicate with the startups. My group worked on the meetup concept wireframes. The following are images of some of the key screens for each concept.
Concept 1 Wireframes: Virtual Meetups
Concept 2 Wireframes: Gamification
The team then tested each of the concepts to determine which resonated more with the users. Results showed that users liked the gamification concept best but that there were a few features from the social concept (i.e. the ability to watch videos and learn about campaigns and the virtual meetup opportunites) that should be included in the next iteration.
+ Users enjoyed the badges and mentioned they would motivate them to be a reoccurring user
+ Users liked being able to see other people’s investment records
- It was unclear to users how much equity they would receive upon investment with a company
- Users found the initial onboarding tips to be overwhelming and hard to understand
+ Users liked the ability to be able to watch videos to learn more about the campaigns
+ Users were excited to be able to participate in virtual meetups to learn more about the company
- Users found the dashboard confusing
- Users struggled to find the direct messaging feature
To prepare for the second round of testing, we created a future-state journey map to visually communicate pain-points and additional areas for platform improvement. After discussions, we worked together to update our wireframes and gave them to the UI designer to complete the high-fidelity version. While those were being completed, my task was to develop our testing script and scenarios. Once the high-fidelity mockups were complete, my responsibility was to create a prototype in InVision to prepare for our second round of usability testing.
We tested the new application with 5 users and were pleasantly surprised to find they found this new version easy to use and engaging. Some quotes from the usability testing:
“I like how easy it is to be a first time investor.”
“Oh! I got a badge. I love it. I want to see what other ones I can earn and what they mean.”
“I like the virtual meetups - I would be interested in attending to learn more about the company.”
Testing Key Takeaways
+ Users loved the look and feel of the website
+ They liked the gamification of the site and wanted to know more about the badges
- Users were worried about adding their payment information so quickly in the sign up process
- There was a lack of understanding regarding what the mountains represented and the information they were providing to the user
Visual Exploration and Branding
Throughout the design process, the team worked closely with our UI teammate to discuss placement and web patterns. Together, the team determined we wanted the final design to convey a sense of fun and excitement while being both welcoming and transparent. Once the mountain logo was designed, the team felt the name Ascend fit well as it works with the gamification theme as well as the investor's hope for increased finances.
High Fidelity Examples
As with any project, and especially this one given the timeline and scope, there are more areas to explore and improve upon. Here are my recommendations for future product adjustments:
- Conduct more usability tests to get further feedback on how users feel and understand the platform
- Update the designs based on the feedback and continue iteration
- Develop the entrepreneur portion of the website
- Create responsive website designs
- Explore the gamification idea further
What We Learned
Test out testing plans ahead of time
Our first usability tests gave us important results but were not as detailed as we would have liked. This was due to the usability testers not all being on the same page and our usability testing plan not being as detailed or concrete as it should have been. We learned quickly the importance of a testing plan and for the second round of testing, created a very detailed plan which resulted in much more consistent testing.
Simple Beats fitting it all in
Given this project involved developing a platform that has yet to exist in the U.S., there was never a shortage of ideas or features we wanted to include. We quickly discovered that if you try to incorporate or do too much at once, it’s difficult to prioritize. Once the team started to focus on specific key components, we found success. We learned to focus on what is most important to the users of the platform and get that right before moving on to the final design.