Quest
leveling the investment capital playing field
the challenge:
Create and design a native application that functions in the realm of financial technology. The application must have a positive social impact.
Figure out how to bridge the gap between entrepreneurs and investment capital.
A mobile app that mirrors the 'match' formula of dating apps and utilizes financial data algorithms to streamline the due diligence process to create introductions between minority entrepreneurs and investors. Also, provide resources for founders to navigate fundraising with more knowledge.
the solution:
Eliminate the barriers to entry for women & minority founders; establish a level playing field to foster innovation and position ideas for great change. Equality in investment dollars makes economies grow; reach untapped niche markets. Solve the issue of only "knowing who you know".
the impact:
RESEARCH
We began by researching the investment banking and capital fundraising industry as a whole. We began by creating a business model canvas which allowed us to put idea to paper at a macro level, figuring out what the arena we were playing in really looked like and who we were going to create a product for and what that product would hopefully achieve. From there, we utilized a competitive brand matrix which enabled us to determine which platforms and tools are currently in use. We were able to deduce from our research where current products were excelling or lacking. Figuring out what the process looks like on both sides of the equation gave us valuable insight and education into the investment banking realm as a whole. By asking, what are the glaring issues within the investment banking space, we became able to help create a solution.
What did we learn? Simply, this is an industry riddled with diversity issues and people crave a solution.
Yale's Endowment Chief tells investment firms they will be gauged by their hiring of women + minorities - investment management one of the least diverse fields - WSJ
In 2019 female founding teams received only 2.7% of all venture capital - Fortune
Only 1% of investment capital in 2019 went to black and Latinx founders to which, Jemma Wolfe head of Launch With GS (Goldman Sachs) said "This is clearly an investment opportunity. - Forbes
DISCOVER
After devouring enough information to feel that we were able to have informed discussions, the team began constructing interviews that would help us dive further into the problems within the space. We set out to interview individuals on both sides of the coin. We interviewed founders, entrepreneurs and small business owners who had gone through the process of fundraising. We listened to their stories about how it felt and what they had to go through to get the money necessary to launch their idea. The team also held interviews with professionals in the field of investment banking, from private equity to venture capital. We let them tell us about their years of experience, asked them for insight surrounding diversity and how it felt to be the deciding factor in somebody else's success story.
Our key takeaways from interviews
"There's incredible information asymmetry. On the venture side, we know so much about the dynamics of funding, because we see that everyday, whereas founders only have exposure to that, maybe once in their lifetime."
"In the beginning, I just was throwing spaghetti on the wall, reaching out to anyone I know that has money"
"I don't have a wide network of entrepreneurs that are people of color that could actually access me, I don't really know how we solve that problem"
"The only advocate in business, is yourself"
"You have to be ready to hear a lot of "no's"
Synthesis
From the beginning our team knew we would be creating a product and developing a solution for two different user sets. Through our interviews we were able to learn about the areas of concern for our user and identity their greatest pain points, as well as learn what their goals and needs of the fundraising process are.
Throughout our design process we relied on Cora and Chad to keep us steady and focused on the user. Cora is an entrepreneur who has gone through the fundraising process to develop her environmental technology company in San Francisco. Chad recently began working at a venture capital firm in San Francisco, daily he is looking for investment opportunities that will contribute to his company's portfolio.
our founder Cora
40 | Founder of EnviroTech Company | San Francisco
Goals:
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Develop her company to revolutionize petrol waste management
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Conduct fundraising round with investors who can also mentor her through expansion
Needs:
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More resources to inform her about fundraising process
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Spend less time fundraising and more time operating her venture
Frustrations:
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Hearing "no" repeatedly is crushing her morale
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Doesn't want to give up such a huge portion of equity in the company to receive funding
our investor Chad
36 | Senior Associate at VC Firm | San Francisco
Goals:
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Closing the next deal
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Wants to diversify his portfolio
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Expand his network and meet more entrepreneurs who are women and/or people of color
Needs:
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Unearth deals that nobody is aware of yet
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Contribute to firms initiative to invest in minority owned businesses
Frustrations:
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Finding opportunities outside of his immediate network is difficult
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The due diligence process takes way too long
What's The Problem?
disparity
Minorities are underrepresented by capital investment
inequity
Entrepreneurs get the short end of the stick
responsibility
A vast wealth of knowledge needs to be shared
equality
Socially conscience investors are turning the tide
So...How might we bridge the gap between investment dollars and businesses founded by people of color and women?
DEVELOP
By marrying financial technology capabilities and the dating app 'matching' concept, our team set out to develop an application that alleviates the issue of only 'knowing who you know'. An application that does the heavy lifting for the user by utilizing data and analytics to put before the user their ideal candidates from both the investor and entrepreneur perspective. While also providing an extensive library of resources for founders to familiarize and arm themselves with knowledge and information about the fundraising process so that they are able to better advocate for their business.
CREAtE
TEST
For testing, users were asked to maneuver through four tasks based on scenario prompts. These scenarios and tasks exhibit the features and functions of the product we are developing.
Scenario One: You are a founder of a new startup. You need to fund your new venture but are curious about your funding options.
Task: Get more information about what seed round capital is.
Scenario Two: For investors to determine if your company is aligned with their funding criteria, you hone in your company's industry, vertical, cap raise amount and round of funding.
Task: Show that your company is in the EnviroTech space, using a SaaS model, needing to raise 10MM in Series A and confirm.
Scenario Three: You're a seasoned venture capitalist who has recently created a new fund which is diversity focused.
Task: Navigate to startups founded by women and people of color.
Scenario Four: You are an investor looking for a new opportunity. Your next investment must have environment initiative, run a SaaS model and needs to be in Series A raising 10MM.
Task: "Like" a company that fits this profile, bonus points if it is founded by a woman and/or person of color.
User feedback is undoubtedly the most intrinsic part of the entire UX process. User testing allows us to determine whether the product is intuitive, learnable and enjoyable for the user. The goal is for the user to be able to naturally flow through the tasks and if they can't we are given valuable insight into what needs to be changed during subsequent iterations of design.
Home Screen:
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resized + centered recent matches to ensure priority
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added "welcome to your feed" to give users point of reference within app
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highlight one hero image versus four smaller images
Resources Screen:
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added photos and used contrast to highlight topics
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added a search bar to make information findable for the user
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took away article preview and made the entire button clickable
User Account Screen:
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increased size of edit icons for added visibility
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removed additional edit icons to reduce clutter
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once selected an option fills in versus being outlined
Diversify Screen:
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utilized contrast of photos to highlight company info
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added hover feature that allows user to see diverse background of founder
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created 'i' info icon that users can click to request additional information
Match Screen:
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moved text across image for visibility and style purposes
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made thumbs up and thumbs down icons more prominent
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removed 'i' icon as it added no value for user
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added search bar so user can hone in on preferences
Confirmation Screen:
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used orange to highlight that a match has occurred, excite the user
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reduced opacity of background image for clear visibility
EVALUATE
The process of user experience design is never over, we have learned every step of the way how to create a more intuitive product, how to design more clearly for our target user and how to not attach ourselves too much to the product we are building.
So where do we go from here? Another round of usability testing with users from various data sites to get insight into the learnability of the app, from their feedback, do another design iteration and repeat this process until we have a product that is ready for launch.
We don't claim to have created the solution for one of the biggest problems of our time but we believe more than ever that we need to find a way to level the playing field and we believe that technology can help guide us there.
In Retrospect...
Between the time this project was completed and writing this case study I have come across an ever expanding pool of articles and statements regarding the lack of diversity in private equity, which venture capital is a subset of, and the need for change. The Wall Street Journal on purpose for reasons of morals or because their focus on economics prompts them to report the facts, has almost daily had an article detailing the lack of diversity within the investment banking sphere. In the exchange section this weekend, "For many in the U.S. Black community, which has historically faced obstacles to building wealth, breaking down barriers to accessing capital is a mission of historic significance." The journal goes on to state, every issue of inequality today, it all stems from economic inequality.