Wefunder Investor Returns Portfolio
The Internal Rate of Return dashboard shows an investor the condition and performance of their investments — whether the investment is worth more or less, or if the company has shut down completely.
This is the biggest hole in our product. Some of the oldest investments on Wefunder are 4-5 years old now, old enough that investors are starting to see results. Since we lack a tool to report results, we have completely neglected the post-investment experience and as a result, a lot of investors have lost confidence in the Wefunder product. This has affected customer lifetime value and the proportion of investors who go on to make second investments (used to be 30% and is now 20%).
To help users understand how their investments are doing and feel secure about the investments being in holding.
The hypothesis is that if investors are given transparent and timely updates about their investments, they are more likely to engage with the product, invest again, and refer Wefunder to their friends.
Investors who have confirmed investments on Wefunder. The demographic is majority male, with location concentrated in the costs and tech hubs, and 70% under the age of 50.
Two designers (me and one full-time contractor) and one senior engineer. Two operations humans for gathering data. Two weeks for design, one month for engineering.
Understanding the Problem
My team mate Linlin and I sat down and tried to spec out everything from the types of investments listed above and the various states and edge cases. This step was important in helping us understand what we were dealing with.
Through this exercise, we were able to understand the challenges of this project:
This project required heavy involvement from engineering. There were some engineering details to consider like how shares and investments are tracked that would affect how we can display the measurements.
As the operations currently is, there are often delays in repayment schedules and general lack of updates from founders and about the companies. Since founders don't have time to provide timely updates on their companies nor do they usually want to disclose information on follow-on rounds actively, it's important to consider this when designing the dashboard. We must set expectations that this dashboard will not resemble a stock portfolio.
This is working in conjunction with the current My Investments page which details companies that have not arrived at the confirmed and holding phase.
Boiling down complexity
It's easy for this to look like a stock market portfolio dashboard, which runs counter to our consistent desire to make things approachable. The fact that we have so many different types of investments that are measured with different metrics also makes it difficult.
Capturing All Cases and Variations
Missing edge cases here would be unfortunate, so extra time was dedicated to make sure the designs are robust enough to handle all foreseeable edge cases.
How to make sure this is actually useful?
After polling our team members and some friends of mine who are active but not sophisticated investors, Linlin and I arrived at some key things users wanted and we needed to address:
Some high level numbers to indicate performance at a glance.
The investments grouped by company
Our hypothesis was that our users’ mental models followed companies they invested in and not specifically the contract type. Thus it was important to group by company, not date of campaign, not security type, not state of company.
Opportunity to Educate
What are the numbers that corresponds to each investment? What numbers indicate whether investment is successful or not? This is the chance to show the investors. It was also important to be clear about realized and unrealized returns.
History of the investment
Obviously it should show all activity on the investment ID. Multiple investments should be grouped together.
Relevant Updates or Tasks
Should include any relevant payout options or recent updates posted by the founders.
The Final Thing
Key performance numbers at the top for easy access.
Investments grouped by company
Companies will usually not have both payout and cash on cash, but we chose to follow the same format so investors become acquainted with the security-specific terms.
A typical investment will be shown as follows:
At the top we will show most recent update from the founder or us. Below that is a ledge of all shares activity, including follow-on financing.
This includes the entire history of the investment to the best of our knowledge, including relevant reports or contracts.
Similarly, if a company has had multiple fundraises with Wefunder, we will also capture the activity in one entry.
We also show the status of the company in the leger as well as visually indicate so.
Acquired companies will show strike throughs and new company/parent name. Failed companies will be grayed out. Exited companies will show terms of exit.
More detail on specific security types
For debt investments, there will be a payment schedule. Again, if a payout is available, the user will be able to indicate payout method here. If the payouts are late, it will indicate so.
Sometimes companies will have hybrid contracts. Hopsters for example, had both debt and equity contracts.
Funds are treated as an “investment” in terms of architecture, with its own collection of companies. It has the same interaction. If a company fails, it is grayed out.
If you expand the company within a fund, you’ll find a similar UI compared to individual investments.
The tool was built about a month after the handoff from design. Unfortunately, the gathering of the data has taken longer than expected and we are still waiting on the rollout of the IRR page. Because of this we haven’t been able to measure the effects.
What went well
This was the first time Linlin and I collaborated closely and it was beneficial having another brain and another set of eyes on this project. Personally I was able to gain more institutional knowledge around investing. We were able to tackle most of the challenges detailed at the beginning (backend, practicality, complexity, & variations and edge cases).
What could've been better
Again, due to lack of resources, we were not able to do user interviews or testing. A lot of this was based on our team members and friends and may not be an accurate representation of the general user base that is slightly older as a whole. The one major challenge of practicality was considered heavily, but that means this IRR still has room for improvement. Many of the data points are not updated automatically and require heavy manual work. Since we do not have dedicated manpower to sourcing these updates, a lot of data points will remain stagnant. This might lead investors to feel that the dashboard may not be as useful.
Although there are numerous areas that could be improved, this is better than what we had before, which is nothing. As long as the new is always better than the old, no matter by how little, it’s moving in the correct direction.