You might have heard about IncParadise sister company, Eqvista. In case you haven’t, Eqvista is a cap table application created to help entrepreneurs manage the shares in their company. It also helps you issue and track the shares all online.

To explain better, Eqvista is a highly sophisticated equity management software that allows company shareholders, investors, and the founders to manage and track the equity in the company. The software also helps them in making smart decisions for management, the company’s capital, and it’s equity.  

And to make the application better and help you handle all the finances better in your company, Eqvista has incorporated two new features. Both of these are financial modeling features to help you understand the finances in your company. It will also help you to make smarter money-related decisions for your company, just like the cap table will help in making decisions for your company’s equity.

These two features are:

• Waterfall Analysis
• Round Modeling

To help you understand what makes them worth being a part of the application, both have been explained in detail below.

Waterfall Analysis

To begin with, a basic “waterfall” in the financial world is an analytical tool which helps in displaying a sequential breakdown of the finances in the company. These representations can be anything from revenue and profit, to the total value of the company.

In fact, you do not just get the immediate values of finances with this tool; you will also find out about the “leakage points” in the company. These help a company track its data in a stepwise manner. Also called waterfall financial modeling, this tool helps in determining the total value of the business and its breakdown among all the shareholders in the company upon exit. 

This is highly useful for investors and the company founders as the company’s share value can be different from the cap table share percentage based on various factors. The next parts would explain it better. 

What is a Waterfall Chart?

The waterfall analysis tool creates a waterfall chart, which is also known as a bridge chart, bridge graph, waterfall graph, flying bricks chart, and cascade chart. This chart is a simple representation that gives you a quick display of the breakdown of the company’s data. 

In a waterfall chart, the final and the initial values are displayed in the form of columns while the individual adjustments are displayed as floating steps. The waterfall financial modeling chart will display all the values based on each preference round. Along with this, it will also show how the exit values are distributed amongst the investors in each round. 

The main reason why the waterfall analysis is needed is because the chart shows every step along with the demonstration as to how you got there. The chart is very simple to create and read. It helps in analyzing even the most complicated details in a easy to read graph. So, this tool will help you a lot for the future progress of your company. 

Deeper Explanation of the Waterfall Analysis

This tool is used to determine the total amount that all the shareholders would get when the company exits. Using the cap table application and this tool, there will be many calculations to determine the various exit scenarios, which would be hard without this financial modeling. This model is used by the shareholders of the company and is also used to make crucial financial decisions in a company. 

Key Features of Eqvista Waterfall Analysis

From the above, you now know how important the waterfall analysis can be for your company. Keeping this in mind, Eqvista has added the feature in its application. This tool in Eqvista uses ultra-modern financial models to calculate the amount each shareholder gets in an event of a company exit. 

As a matter of fact, Eqvista does not just focus on the option holders and the common shareholders in the cap table of the company. They have also included a simple to understand and unique chart for investors during the preference share rounds. 

Here are the basic key features of the waterfall analysis:

• Cap Table comparison of payout values
• Waterfall chart for preference rounds
• Preference liquidation breakdown of preferred investors
• Advanced calculations for preference rounds
• Converted liability option for note holders
• Cash Dividend option for preference shareholders
• Multiple inputs for exit date, exit value, and possible transactions fees
• Instantly reactivity for efficient analysis

All these features have been added into the application along with a very user-friendly interface for any exit scenario. Other than this, the user interface has a lot of features to help easily manage the cap table from there directly. In fact, the tool doesn’t just display the exit scenarios results, but also has the information needed for reviewing the payout given to the shareholders in the company. 

Round Modeling

Round modeling is another tool in Eqvista which help management and investors of the company to see how the company’s cap table will be diluted when a new investment comes in. The round modeling financial analysis also takes every new option pool into consideration during a new investment deal. 

With this tool, the company can easily make crucial decisions based on when and how much investment the company can take from an outside investor without having the cap table heavily diluted. This is a very important tool, especially for new startups. It helps manage the cap table while handling the effects of share dilution for the current shareholders of the company.

Key Features of Eqvista Round Modeling

The tool on Eqvista helps you create different dilution scenarios so that you can understand and make decisions based on how the shares will be diluted in the cap table when a new investment is introduced into the company. Here are some of the main features of the Eqvista round financial modeling:

• Graph chart & key figures of new investment
• Pre-money & post-money convertible basis
• Convertible note interest options for convertible notes
• Convertible rate options for preferred shares
• Pre-money & post-money convertible basis
• Basic and advanced version of new investment
• Multiple inputs for post-money & pre-money valuation, date of investment, and investment amount
• Instantly reactivity for of input data

And thanks to all these features on Eqvista, this financial modeling tool will help your company reach new heights. In fact, Eqvista has multiple functions attached to this tool that differentiates it from the other platforms.

Conclusion

With the advanced calculations of the waterfall analysis and round modeling, this is something that may be used a lot in the future. Keeping this in mind, Eqvista has incorporated these into its application. So now, you can easily calculate the financial rounds during the exit of your company and calculate every other financial decision as well. 

With the round modeling feature, you will be able to see how your cap table will be diluted with new investments. These both can help you in handling new investments and the financial aspects of your company. Give this a try now, or contact us for more details!