Dynamic Waterfall Chart for Venture Capital Share Valuation

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Solution Overview

Problem

Estimating the prices of different types of stock at various enterprise values for a business enterprise is challenging due to the complexity of successive series rounds of venture capital funding and the issuance of preferred and common stocks.

Innovation Solution

A dynamic waterfall chart is generated, allowing users to select an enterprise value along an x-axis, with corresponding share values displayed on a y-axis, providing an overlay that indicates the values of different types of shares, such as those issued during series rounds of venture capital financing or common shares, based on the selected enterprise value.

Engineering Contradictions & Design Principles

VSEngineering Contradiction Analysis

1Adaptability or versatility

If a static chart is used to display share values, then the device complexity is low, but the adaptability to different enterprise values is poor

Engineering Contradiction:

Improveadaptability to different enterprise valuesVSAvoidchart complexity

Core Design Contradiction:

Adaptability or versatilityVSDevice complexity

Solution Approach 1:

The patent implements a dynamic waterfall chart where the enterprise value indicator can be moved along the x-axis to select different enterprise values. The chart automatically recalculates and redisperses share values based on the selected enterprise value, transforming a static display into an interactive, adaptive tool that maintains visual clarity while providing versatility across multiple valuation scenarios.

Inventive Principle:

Principle #15Dynamics

2Loss of information

If detailed share value calculations are provided for all enterprise values, then the information completeness is high, but the ease of operation is reduced due to information overload

Engineering Contradiction:

Improveinformation completenessVSAvoidease of understanding

Core Design Contradiction:

Loss of informationVSEase of operation

Solution Approach 1:

The patent extracts and highlights only the share values corresponding to the selected enterprise value through a graphical overlay on the waterfall chart. This selective display approach maintains complete underlying data while presenting only the relevant information at any given moment, preventing information overload while ensuring comprehensive data availability when needed.

Inventive Principle:

Principle #2Taking out (Extraction)

3Productivity

If manual calculation of share prices is performed, then the measurement precision can be high, but the productivity is low

Engineering Contradiction:

Improvecalculation speedVSAvoidshare price estimation accuracy

Core Design Contradiction:

ProductivityVSMeasurement precision

Solution Approach 1:

The patent replaces manual calculation methods with automated computer-based calculations. The system uses the selected enterprise value to automatically compute and display corresponding share prices for different share classes, eliminating time-consuming manual arithmetic while maintaining precision through consistent application of valuation formulas and algorithms.

Inventive Principle:

Principle #28Mechanics substitution (Replace mechanical system)

Data Source

PatentUS11776178B2Dynamic waterfall charts

Publication Date: 2023.10.03 FORGE GLOBAL INC

AI summary

A graphical chart indicating values for different types of shares of a business enterprise are described. A server can provide data representing price per share and enterprise values for a graphical chart. A selected enterprise value for the business enterprise can be received and values of different types of shares at that selected enterprise value can be determined. Data indicating the values of the different shares can then be provided for display upon the graphical chart.