Investor Annual Report


What is the annual report?

Companies launching equity crowdfunding campaigns need to file with the SEC a creatively named form called the Form C. After the campaign ends successfully, the companies are required to file an updated version of this each year — the annual report or Form C/AR.

The Problem

Most companies do not file this since they don’t have a clear tool to do so.

It’s a manual process that is tedious and laborious for us.

The reports are not publicized or given to the investors. The investors then are kept in the dark

The report itself, if a company even files one and an investor somehow finds it, is convoluted and full of jargon.

The Challenges

  1. Balancing between professional and approachable

  2. Actually being useful: useful info, scannable format, easy language.

  3. Disclosing enough information while considering the founders who would be generating this report.

  4. Breaking away from the usual mold of “formal reports”

  5. Reminding users of the excitement

Some Assumptions

  1. The biggest (and safest) assumption is that investors want updates about their investments.

  2. More frequent and more high-quality (with objective metrics on company finances) will lead to more repeat investments.

  3. Higher quality updates once in a while is more effective than frequent low-quality updates.


What the report looks like now

 The horror.

The horror.

Some other platforms tried to improve it to this

 But it’s still just walls of text.

But it’s still just walls of text.


The Process

  1. Defining Requirements

    1. What’s required by the SEC?

    2. Of the requirements, what do users want to see/find useful?

    3. Showcase the useful, hide the rest.

    4. What are some things that are easily procurable for founders? Of this set, what will offer value to users?

    5. What are things users would find useful that we don’t currently ask founders for?

    6. What actions should users be able to take from here?

  2. Research

    1. What do users find helpful?

    2. What are other Reg CF sites doing?

    3. Using our support inbox (and the tagged tracking system) I was able to get a general sense of what types of info users usually ask for.

    4. Are these requests related to time of year?

    5. Relationship between frequency of company updates and investors’ likelihood of repeat investments?


Some rejected ideas.


Let’s take a look at the new report

  1. Be Human

    Investors want to see something human. Since it’s often months and even up to a year since the last time investors heard from founders, there’s a wide digital barrier between founders and investors. An intention of this annual report is to humanize the founders so they understand that these are people who are working hard, doing their best, to grow a business.

  2. Be Scannable

    I was intent on being approachable and only show the relevant information. This means that risks, director structure, company details, and other information that would not have changed since the investor initially reviewed the form c, are hidden under “The Weeds”. Broad trends should be easily discernible at a glance.

  3. Be Scalable/Reusable

    There are some components in this annual report that we decided could also be showcased elsewhere. In order to minimize amount of resources taken up, I want to either reuse existing components or build components that can be reused elsewhere.

    1. Report card: We’re exploring using this format for due diligence on companies currently campaigning. Industry experts and veteran investors will be approached for their separate opinions on an investment opportunity. The results are then aggregated and shared either via our newsletter or a report card embedded in the company profile.

    2. The Q&A: usually there are no ways to interaction with an official report, but for no good reason. This component is used in numerous places, on this report, the company profile, as well as the company community page.

How do investors get access to this?

Once the company files the report with us and we file it with the SEC, we’ll send the completed report to the investors via email. The investors will also be able to access the report from their investment dashboard as well as the company’s profile. Of course, they will always be able to find the filed copy via the SEC online portal.

Closing Thoughts

  1. Limitations

    This report is highly limited by our time and engineering resources. Because of that, it is bound by the current structure of Form Cs on Wefunder and how they are generated (our internal editor tool). I was not able to completely dream up a new format of annual reports, but tried my best to break from the usual mold of reports and forms.

  2. Future Evolution

  3. How to validate/invalidate assumptions?

    1. We could look at the breakdown of our support tickets tagged as “post-investment experience” and the proportion of which asked for company updates (additional “company update” tag).

    2. Segment further based on company and whether company filed an annual report.

    3. Track the % of investors who received annual reports that went on to invest in another company within certain time span of receiving this report.

We did experience a spike in investment volume around June and July (the annual reports went out mid May), though this correlation is definitely confounded by numerous other variables like better quality of launched companies, new company profiles that improved conversion, and increased number of launched companies. With our limited measurements, it’s hard to suss out the true “cause” of the investment volume spike, making it very hard to validate or invalidate these assumptions. This validation aspect thus became one area I’m insistent on doing a better job with in the future.

The counterpart to this project is the annual report generator (ARG), which I’ll cover in a separate case study.