The tedium caused by traditional investment paperwork has long plagued shareholders and investors alike. Paperwork friction like printing and faxing sensitive tax documents and filling out repetitive information page after page in an agreement makes a complicated process that much more complicated.
Not only can complications like these hold up deals, they can ignite serious hesitations from customers and cause fissures in business relationships. EquityZen, a marketplace for private investments, is changing all that.
EquityZen helps private companies and their shareholders manage liquidity issues while also helping qualified investors access private companies. And with a name like EquityZen, it’s clear that the company wants their clients to have peace of mind.
They’ve been a user of HelloSign since 2013 and employ features like embedded signing and auto-populate for text fields to simplify the investing process for all involved.
“Our customers have told us that our platform, including the investment process, offers a superior user experience compared to our competitors. The ability to eSign documents is a huge user experience boon for us.” The simplification of the paperwork process is an integral part of how EquityZen has positioned themselves as leaders in investment tech.
Read more to learn how they’ve done it.
How EquityZen is Reinventing an Antiquated Industry
The biggest risk in joining a growing private firm or startup is that a substantial amount of your net worth gets tied up in illiquid and hard-to-value shares. Until an IPO or other liquidity event, those shares can often feel like monopoly money.
But what if you could free up that equity in a private marketplace? As companies are staying private longer, much of the value creation and growth is in the private markets. Accordingly, there’s a growing demand from investors seeking to invest in pre-IPO startups but don’t have the access to those shares.
That’s where EquityZen stepped in.
Having faced the illiquidity problem themselves, the founders of EquityZen sought to solve the problem by creating a secure marketplace that matches shareholder offerings with investor demand.
Once a shareholder and a qualified investor are matched, it’s essential to keep the agreement flow as simple as possible. Having documents bouncing back and forth between parties is a recipe for deal disaster.
A proven way to ensure that doubts are eased is to have a dedicated workflow that allows transparency by both parties into the status of their deal.
“Through the HelloSign API and our own proprietary technology, an investor can complete an investment seamlessly and without physically signing a single sheet of paper.
With HelloSign, we’ve been able to bring the previously antiquated process of completing private transactions into the digital age.”
A Little Help from HelloSign
With the average investment consisting of over 20 pages of paperwork, EquityZen turned to HelloSign to create a seamless and paperless investment process. Their goal was to maintain a unified user experience that eliminates the need to bounce back and forth between platforms.
“Seamless integration with our website has given users the ability to have a consistent user experience throughout the transaction process without ever having to leave the EquityZen domain.”
Here’s a peek at what it looks like:
Having utilized the HelloSign API to implement embedded signing, EquityZen is also able to pre-populate agreement fields rather than have clients fill them out themselves.
On average, clients using EquityZen generally only need to fill out 5 fields on their own.
Limiting the number of fields the investor or shareholder must fill out has not only improved the user experience, but it's also prevented errors and saved EquityZen time when reviewing documents.
EquityZen’s Integration By the Numbers
The integration has already had many positive results, for both EquityZen's clients and the developers who integrated the HelloSign API. Here some of the impressive numbers:
2,869 – the number of minutes that EquityZen estimates they save a client in average agreement turnaround time.
“With eSignatures and the HelloSign API integration, the median time it takes to complete the investment process is around 11 minutes. Using a print-and-scan method, it would likely take between 24 hours and 48 hours to complete an investment.”
5 – the number of days EquityZen spent implementing the HelloSign API.
Originally they built the integration with just signature requests (vs. embedded signing). That integration took them 3-4 days to fully integrate, test, and deploy. After review of this integration they decided to move into a fully embedded signing experience and that additional work took another day of development work.
“We generally had 2 developers working on the integration and they spent around 70% of their time on HelloSign work during the integration process.”
What’s Next for EquityZen?
EquityZen is committed to bringing greater transparency and efficiency to the illiquid and opaque private markets. Recent initiatives include EZ Advantage, a tool to compare companies easily; and the EquityZen Market Sentiment Index, which provides a pulse on market participants’ attitudes towards private markets.
EquityZen continues to work toward solving liquidity issues for companies and their shareholders, and they have grand ambitions to scale up those efforts.
“We’ll continue to look for ways to integrate HelloSign as we grow, to keep improving the user experience and to make our lives easier.”
HelloSign will continue to support their mission.