Waterfall analysis

A “waterfall” in the financial world is a tool that visually represents the sequential breakdown of a starting value to the final results, such as the ownership by displaying intermediate values and leakage points. It is used by companies to track data on each step. When it comes to tracking shares in a company, the waterfall analysis is used to calculate the breakdown of the total value of the company amongst the shareholders upon exit of the company. This is useful for both the company investors and the founders as their share of the company’s value might differ from the cap table percentage of shares, based on various factors. It is a method that presents the company’s data in an impactful manner, which is also why it has become very popular in recent years. Its complex calculations take into consideration a multitude of factors to determine the final results of the exit value for each shareholder. With this clear, if you still have doubts and want to understand more about the waterfall analysis, check out our article and knowledge center here. Also, if you want to see how the tool works, you can begin to use Eqvista to see it (if you have not yet joined it). Check out our cap table software here & contact us today!