What it used to be:
Every year, companies that raised funding via Regulation Crowdfunding have to file an annual report to their investors and the SEC. Usually, the results of this filing ends up in a report that looks something like this:
Or at best, this:
Let's be honest: the first version is atrocious. The second is only marginally less atrocious.
Why change it?
Because who wants to read that monstrous thing above? There's a lot of valuable information hidden away behind walls of text that should be made plain and apparent to investors. What is the reason of presenting the information in a pdf full of text other than the fact that it's always been this way?
We figured you might want to see how your investments are doing instead of look at letter blobs. But instead of sending you that thing above, we made it something not only easy to read, but actually fun to read.
How and when?
These reports go out once a year when companies file their annual reports. If a company doesn't file one, sadly we won't have any information to display. Once a company submits their report, they'll receive an annual report they can use to share with investors. We automatically send that report to their investors on Wefunder via an email and update.
What problems are we trying to address?
First, founders are busy and can't always update in a timely fashion. Second, We are not doing a good job at all in informing you how your investments are doing. We're gracious that so many of you have stuck it out with us despite being in the dark about your investments for so long. Although it is not our duty to provide updates on behalf of the founders and companies, we should be giving you a way to track your investments.
We're working on that one, and it's almost here.
So before that happens, we wanted to leverage something more near term. Annual reports are a required annual update to the investors and we jumped on the opportunity to make this a meaningful exchange for you.
Let's take a look at what is in an annual report
In addition to the required information like material changes to the company (changes in leadership team, the board, finances), I decided to add a human touch to these reports. Investors don't have a lot of opportunities to interact with the founders they invested in. It's easy to forget that the founders are just people who had a dream because you don't get to talk to them often. So I decided, let's have the founders write a letter to you.
Investor Letter:
This is where founders can say whatever they want, talk about whatever they want to talk about. There's a section dedicated to letting founders ask their investors for help. We know a lot of you invest in companies because you believe in the founders or the mission. You're passionate about helping them succeed — and this is the perfect chance for founders to ask you for help because you are valuable advocates for their business.
Report Card:
When generating the annual report, founders are asked to give themselves a grade for the past year. What were the three best things and three worst things that happened? This part is more anecdotal, but puts a human element to the investment beyond just numbers and figures. Founders get to tell you what they're excited about!
The Numbers:
But of course, we still have numbers because these are crucial to helping investors understand what happened the past year. We put together five numbers at-a-glance that you might be most interested in. All numbers are always available in the attached financial statements.
And guess what? Just a little hint from me to you because you're one of the cool humans actually reading this: the icons change depending on the numbers. ;)
Financial Statements:
You can also see visualizations for the company's income statement, balance sheet, and financial narrative. The attachments are included below.
We Love Our Investors:
This would not be possible with you, the investors. You believed in the founders. You believed in the moonshots. You believed in the cancer drug that had no ttangible product You believed in the fusion reactor trying to find alternative energy. You believed in the neighborhood brewery. You believed in us. You don't get thanks often, if at all. So here it is, enshrined on the company's annual report, each and every single one of you.
The Details:
Alright, there will always be those who want the fine print. That's you isn't it? To be honest, I'm one of those people, so I got you covered on the deets. If you click "Read More", you'll be able to see all details like team, voting rights, past raises, related party transactions (if any), cap table, risks of investing, all prior updates, and the contract. It's basically full of stuff that doesn't really make any sense when you read it but seems like a sentence so you just say "ok seems legit" and close the page.
And lastly...
Say Hello:
When you invested, you had the option of writing a message to the founders. We kept all of those and sent it to the founders. But I'm sure there is still plenty you'd love to say to the founders.
Where do I find this?
If your investment companies filed annual reports, you should've received an email notification from us with the reports. You can also go to your My Investments page, head to the company, and find annual reports there.
As always, let me know what you think!
You can find me at [email protected].