Fundit
We are invited to turn a investor & founders matching business idea into a MVP design, as a part of a pro-bono project. Started from user research with investors and start-up founders, we designed a web versions at first. The founder was impressed by the end results, and turned into a paid opportunity to expand the product to mobile, and to build the branding from ground up.
Sehr, the founder of Fundit, reached out as she had a startup idea that can foster and de-risk investment decisions on businesses in the Private Equity and Venture Capital sectors. The original request is to integrate an assessment tool that assess qualities and capabilities of start ups, which gives more confidence for investors to make smart and successful investment decisions. As making the product scaleable is one of the objectives the client looks for, a mobile app is the initial requested format of the deliverable.
Originally we had 2 weeks to work on the mobile app. During the presentation, we pointed out the next steps, and rooms for developments. After the presentation, Sehr was satisfied with the result, and decided to offer an internship to work on the web version.
At first, we did secondary research on the background and market research on the startup investment & funding process. Then, we focused on interviews. We interviewed 4 investors and 6 founders throughout the process.
Most of the competitors, like AngelList, Fundsup, Investor Hunt, Republic, etc. are based in America. In Asian markets, such platforms are lacking. Asian startup ecosystem relies on networking events.
The interviews were conducted both online and in-person. The findings are then collated in an affinity map, personas, and journey map.
Interview findings are organized in affinity maps, one for founders and one for founder. As the defined on the brief, the primary focus is on the investor users first.
On the investor’s end, we divided the insights into 4 categories, qualities in founders, requirements for the startup, process on investment decision, and pain points in the process.
Integrity is the biggest quality that investors look for in a founder, and integrity builds trust. Trust is the foundation for any business. The drive, people skills, and growth mindset are also considered as desirable qualities in founders. How investors evaluate such qualities heavily rely on their intuition. When investors meet up with startup founders, they make a decision within the first 15 minutes, and make up their mind if the founder possesses qualities they wanted.
On the requirements for startup, outstanding reputation within the startup community is the most significant requirement. Investors often tap into their network, and ask for references or comments on the startups they are interested in investing in. If the founder or startup has great references, investors would only then proceed further. The team's past experience plays an important role as well. If the founder or team member had successful exits and related education from top tier universities, the startup has a higher chance of success, which is a compelling reason to invest in. The remaining requirements include a comprehensive business plan presented with pleasant UX, and ethical concerns.
In terms of the process, investors take 5 major steps in their investment decision:
In terms of the pain points, filtering our companies within their interested markets takes a long time. Digesting all the documents, numbers, and reports is very time-consuming. Screening is a major pain point. Also, there are way too many phishing “startups'' in the market. It is a big disappointment when a “startup” looks good on the outside, but after spending some effort looking into the “startup”, contradictions show up, often during due diligence. The effort is wasted, which is annoying.
Demographics
Psychographics
The value we could offer: To facilitate the evaluation and filtering process of businesses securely and legitimately
Demographics
Psychographics
The value we could offer: To gain exposure among investors which they don’t have access to and education on raising funds and growing their businesses
For investors, the process of evaluating companies is time-consuming. Investors spend a long time filtering out companies for investors. It involves getting to know the founders and teams, and insights on the company, as well as market research. Investors might encounter people who fish or are dishonest and it is a big time-waster.
Attributes are important. But it takes a long time to understand and validate the candidates through events and conversations. It is hard to automate an assessment tool because intuition and experience plays a big role when it comes to selecting the right team to invest in. They have to meet in person.
By combining the insights from the affinity map, the main pain point for investors is not that they have difficulties in evaluating startup founders. They do it by intuition and first impressions, which happens within a quarter of minutes. The real pain point lies at the beginning stage of screening. The step before speaking directly to the founders to make real conversation. Therefore, an assessment tool is not the most suitable solution, but a smart matching system will do the job.
For both investors and founders, It is difficult for them to match up since investors are oftentimes focused only in a few selected businesses, and founders rely heavily on referrals in order to access the network of investors.
How might we facilitate exchange between investors and startup founders in a secure and legitimate way at an initial stage?
To foster a secure and authentic matching experience, I've come up with the below 3 strategies:
In order to register an account, users have to verify their phone number and email address. The next step is to set up the profile. It is necessary to enjoy the full functions of our service, as profiles would rank higher in our database when the profile is more completed. The more documents submitted and verified, the more completed the profile is. The documents include, business plan, accelerator experience, company structure, traction, prototype demo, customer reviews, and exit plan. These documents will again be verified by the in-house team.
Once the profile and documents are validated, verification badges will be given to the corresponding content. By doing so, users could tell which business is legit, and save some time from initial evaluations.
Based on the submitted information during registration, the algorithm automatically recommends profiles for users. In addition, users could use more specific filters like funding amount, market location, even with submitted documents, for any particular interest.
A good reputation within investors’ networks plays a decisive role. By including endorsements within the platform provides credible reference for potential investors. Endorsements would be shown in each company’s profile. These endorsements are credible as the name of the person who leaves the endorsement sticks with the endorsement. Given that the registration threshold is quite high, users are not likely to spam, as their name and reputation are attached to the profile. Moreover, endorsements given within our platform will automatically rank higher in the company’s profile.
The operation cost at least 300K per month, and the minimum 8 months are required in order to develop the product from scratch. It includes hiring a team of UX/UI Designers, Lawyers, Due Diligence Analyst, Software Developers, Business Development, Marketing, and Graphic Designers. The cost and threshold of starting from scratch is extremely high for the client.
However, we know that the client is a board member of Xccelerate, an education startup that focuses on technologies including software development, data science, UX, blockchain, data analytics and more. Xccelerate has a team of in-house developers, designers, marketing experts, and also students equipped with the latest tech knowledge. Some of these students had their startup ideas, and worked on them during the courses. Why don't we integrate the business idea of Fundit into the Xccelerate ecosystem?
Xccelerate already has manpower and resources (students, staff, and the connections Xccelerate has). Also, a big part of the puzzle we were dealing with was security issues (verification) and the exclusivity of the product. These issues can be addressed much more easily as Xccelerate can help with the screening process and the first batch of users would be internal.
There are 4 main pathways in the user flow. First users register their account, and wait to be approved. Founders are encouraged to upload as many documents as possible to the system during registration in order to get verified, and rank higher in the matching results.
Then, at the home page, profiles would show up based on their own profile. Or they could search with filters with fund size, documents submitted, etc.
Thirdly, in each company profile, a section with endorsements will always be available for reference. For founders, these endorsements are from previous investors. For investors, it shows what endorsements they’ve left for the startups.
Also, specifically for founders’ profiles, a section of company documents would be made available for founders checking. They could save the time back and forth requesting documents. Now it’s all done with a quick tap.
Lastly, if both parties are interested in taking it further, the system directs them to the chatroom for more conversations, and even schedules a meeting.
We kickstarted with hand sketched wireframes to figure out how many screens we need to complete, and which of those should be priority. Hence to determine a basic wireflow of which buttons should connect to which screen.
The low fidelity prototype is done with Balsamiq. WIth this prototype, we ask 2 investors for preliminary feedback. The main feedback are shown as below:
Taking feedback from the low-fidelity prototype, companies profiles and documents are updated with more options available. We pushed the fidelity, and constructed a design system for the interactive prototype.
After the initial presentation of the mobile app version to the client, she really liked the idea and execution. She invited 3 of us to continue as paid interns to develop the product further. As a result, we are able to speak with more investors at the beginning from the client’s personal network. We received the following feedback:
Therefore, we started working on the desktop web version of the product. Also, we’ve added a function where interested investors can still request a copy of the documents. But the startups have the option to approve or dismiss such requests from investors.
Moreover, as the client wanted to bring the product to life, the branding has to be more refined. I worked on a better version of the logo, with mockups of applications.
The next steps for developing Fundit is to work on the watchlist or newsfeed. It creates retention for the business. Investors and founders could stay updated on updates from their interested parties. As a result, keeping them on the app.
Afterall, we are glad that the client really likes our designs, and decided to offer us paid internships to carry on with the project. It was also a great experience to get to know how investors work and make decisions. At the same time, we are proud of ourselves for basically coming up with a new business idea from the ground up, and convincing the client that the idea works.
