METHOD FOR VALUATION AND SALE OF PRIVATE EQUITY TO ACCREDITED INVESTORS BY MEANS OF A RANKED, ALGORITHMIC, DUE DILIGENCE PROCESS

• US 20080301060A1
• Filed: 06/02/2008
• Published: 12/04/2008
• Est. Priority Date: 05/31/2007
• Status: Abandoned Application

• Current Assignee: The Ayers Group (People 2.0 Global LLC)
• Original Assignee: The Ayers Group (People 2.0 Global LLC)
• Inventors: Ayers, William M.
• Application Number:
  US12/131,530
• Publication Number:
  US 20080301060A1
• Time in Patent Office: Days
• US Class Current: 705/36R
• CPC Class Codes: G06Q 40/04 Trading; Exchange, e.g. stocks, commodities, derivatives or currency exchange
• CPC Class Codes: G06Q 40/06 Asset management; Financial planning or analysis

Abstract

A computer implemented method to provide a valuation estimate and secondary market exchange for private equity securities is disclosed. The valuation of the security is accomplished through a performance ranking in which time dependent values of multiple quantitative and weighted qualitative factors are calculated to provide a automated surrogate method for a traditional due diligence valuation. This method greatly facilitates the valuation analysis and liquidity of the private equity. The market participants are limited to US Securities and Exchange Commission defined accredited investors.

Claims

1. A method for providing a valuation estimate and resale of a private equity security comprising the steps of:

receiving a plurality of quantitative and qualitative values associated with the security over a communication network;

storing the plurality of qualitative and quantitative values in a matrix;

performing at least one linear algebraic calculation on the matrix;

converting the matrix to a valuation estimate number;

determining a valuation estimate ranking for the security indicating the value of the security compared to a group of similar private security listings; and

transmitting the valuation estimate number and the valuation estimate ranking to a first user over the communication network.

2. The method of claim 1, wherein a portion of the quantitative and qualitative values are received from a second user.

3. The method of claim 1, wherein a portion of the quantitative and qualitative information is periodically retrieved from an electronic databases and sources.

4. The method of claim 3, wherein the quantitative and qualitative values are comprised of intellectual property data associated with the security.

5. The method of claim 4, wherein the intellectual property data comprises the number of issued patents and patent applications held by the entity associated with the security.

6. The method of claim 5, wherein the intellectual property data further comprises the number of other patents or applications which cite an issued patent or patent application held by the entity associated with the security.

7. The method of claim 5, wherein the intellectual property data further comprises the number of patent licenses granted by the entity associated with the security.

8. The method of claim 3, wherein the quantitative and qualitative values are comprised of venture capital fund data associated with the initial sale of the security by the originating venture fund.

9. The method of claim 8, wherein the venture capital fund data comprises the number of venture fund co-investors, the venture fund rank in industry surveys, the venture fund lead manager rank in industry surveys, number of initial public offerings by the venture fund, number of companies sold through merger or acquisition by the venture fund.

10. The method of claim 3, wherein the quantitative and qualitative values are comprised of university affiliated investor group data associated with the original sale of the security.

11. The method of claim 10, wherein the university affiliated investor group data is comprised of an associated university survey rank, the number of affiliate group original investors, the affiliate group completed initial public offerings, the affiliate group companies sold by merger or acquisition, and the affiliate group news citations.

12. The method of claim 3, wherein the quantitative and qualitative values are comprised of angel investor data associated with the original sale of the security.

13. The method of claim 12, wherein the university affiliated investor group data is comprised of angel group membership in the Angel Capital Association, the number of original investors, the angel group companies sold by merger or acquisition, and the number of angel group news citations.

14. The method of claim 3, wherein the quantitative and qualitative values are comprised of financial data associated with the security.

15. The method of claim 14, wherein the financial data is comprised of the original equity purchase price, the number of outstanding shares, the revenue history, the margin history, the revenue growth rate, the earnings estimate, and the commercial bank prime interest rate.

16. The method of claim 3, wherein the matrix is partially comprised of numeric weighting factors assigned individually to the qualitative values.

17. The method of claim 16, wherein the qualitative values comprise the class of shares offered, the issuing entity restrictions on security sale, the security technology sector, and the published sector rotation prominence associated with the security.

18. The method of claim 16, wherein the numeric weighting factors are modified by a computer implemented statistical correlation algorithm between the final private security resale price and the valuation estimate ranking.

19. The method of claim 1 wherein the resale of the security is accomplished by a sale type selected from the group consisting of a sale at a set price with no time limit, a sale at a set price within a prescribed time limit, a sale within a range of a minimum and maximum price based on the valuation estimate, and a sale at a maximum price above the valuation estimate.

20. The method of claim 1 wherein the private equity security is of the type defined by the United States Securities and Exchange Commission Section D, Rule 144 as restricted shares or limited partnership interests.

21. The method of claim 1 wherein the communication network comprises the World Wide Web.

22. The method of claim 1, wherein the communication network comprises a private intranet.

23. The method of claim 1, wherein the first user is an investor as defined as those allowed to participate in private resales under United States Securities and Exchange Commission Section 4(1) and 4(2).

24. The method of claim 1, wherein the first user is provided a Rule 144 resale opinion letter based on the valuation estimate number.

25. The method of claim 1, further comprising the steps of:

determining a private investor subcategory group; and

displaying the private equities in a sorted fashion based upon the private investor subcategory group.