Dynamic Waterfall Charts for Multi-Class Share Valuation
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Solution Overview
Problem
Estimating the equity value of a business enterprise based on different classes of stock is difficult due to varying prices and types of shares issued in successive funding rounds.
Innovation Solution
A dynamic waterfall chart is generated to display the values of different types of shares (e.g., preferred and common stock) based on a selected equity value, using an x-axis for equity values and a y-axis for price per share, with an overlay providing detailed share values.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Productivity
If manual calculation methods are used to estimate share prices at different equity values, then flexibility in analysis is maintained, but the process becomes time-consuming and complex
Solution Approach 1:
The patent uses historical funding round data as a template to generate projected share prices at different equity values. By copying the structure and relationships from actual funding transactions, the system can rapidly project prices without manual calculation for each scenario
Solution Approach 2:
The system changes the equity value parameter to dynamically recalculate all share prices across different funding rounds. By establishing mathematical relationships between equity value and share price based on historical data, the system can rapidly project prices without manual calculation for each scenario
2Loss of information
If detailed breakdowns of all share types and funding rounds are provided, then complete information is available, but the data becomes difficult to understand and interpret
Solution Approach 1:
The patent segments the complex equity structure into distinct visual components representing different funding rounds and share types. Each segment is color-coded and positioned to show its relationship to the overall equity value, making the information both complete and easily interpretable
Solution Approach 2:
The patent transforms one-dimensional tabular data into a two-dimensional waterfall chart where the vertical position represents equity value contribution and horizontal positioning shows the sequence of funding rounds. This dimensional transformation makes the complex equity structure visually intuitive while preserving all necessary information
3Device complexity
If static charts displaying fixed equity values are used, then simplicity of display is maintained, but the ability to analyze different valuation scenarios is limited
Solution Approach 1:
The patent implements a dynamic waterfall chart where users can drag an equity value indicator along the vertical axis to instantly recalculate and redisplay all share prices. This maintains visual simplicity while enabling flexible analysis of different valuation scenarios through interactive manipulation
Solution Approach 2:
The system provides immediate visual feedback when users adjust the equity value indicator, automatically recalculating and redisplaying all share prices across funding rounds. This real-time feedback loop allows users to explore different scenarios while maintaining awareness of how changes affect the overall equity structure
Data Source
AI summary
A graphical chart indicating values for different types of shares of an entity are described. A server can provide data representing price per share and equity values for a graphical chart. A selected equity value for the business enterprise can be received and values of different types of shares at that selected equity value can be determined. Data indicating the values of the different shares can then be provided for display upon the graphical chart.