Fund level scenario modeling

This is the user manual for the fund level scenario module in EEInvestor.

First-time use

By default, there will be one scenario listed for each company of the fund. The default values for these companies (which can be seen by expanding a company's row) are as follows:

  1. Exit Amount = the company's EV

  2. Exit Date = January 1, 2022

  3. Expected Dilution = Empty until defined otherwise

Actuals

The values that are listed in the top left under "Actual" and the values on the rows for each company are the actuals of the company. The "Actual" values are uneditable within the Scenarios feature. Inactive companies' scenarios are also uneditable within the Scenarios feature.

Settings

If you want more than one scenario, update the scenario names, change the default expected dilution, or edit the exit date you can navigate to the settings by clicking on the Gear icon.

Changing the values for "Default Dilution" or "Default Exit Date" will have the following effects:

  1. The values will only update for the currently selected Fund

  2. Newly saved "Default Dilution" and "Default Exit Date" values will only be updated for companies that have NOT been manually updated in the scenarios view.

Working with scenarios

Entering inputs

Users can enter the following values within the company-level scenarios, by expanding a company's name in the companies table:

  1. Exit Amount: This is a monetary value, which equals the expected Exit Amount for the company. This would be how much a company liquidated for.

  2. Exit Date: This is the date that would be used for an exit event. It is important for IRR calculations.

  3. Expected Dilution: User can set an expected dilution percentage which would affect the proceeds and the overall company and fund level calculations. The expected dilution calculation used to determine the proceeds is: Company proceeds = proceeds as determined by EE waterfall * (1-Expected Dilution). Alternatively, user can pick a cap table specific scenario, as set out below, to model a complete next round follow on investment.

  4. Using next round scenarios already created in the cap table: a user has the ability to model fund level scenarios which are based on "next round" assumption which they entered in the cap table (for a guide on how to create scenarios in the cap table, see Create and edit a What-if scenario). Once a scenario has been created in the cap table, we can choose a scenario in the new Scenarios Module by opening the dropdown as follows, and picking a cap table scenario name from the list:

and click the "Save and Calculate" button to view the results on the company level. The output will consist of:

"Proceeds" – this is what the Fund is expected to receive in the case of an exit event, for the Exit Amount, Exit Date set by the user, and either the Expected Dilution or the selected cap table scenario. This takes into account all liquidation preferences, Anti Dilution provisions and additional terms set in the cap table.

"IRR" – this is the company's IRR, as calculated by our waterfall, taking into account the amounts and dates of investment made by the Fund, and the calculated Proceeds.

"Multiple" – this is the multiple output, taking into account the Fund's investments and the calculated Proceeds.

Saving inputs and checkboxes

The checkboxes on the left-hand side of the company-level scenarios is for including or excluding changes in the fund-level scenario.

  • If a checkbox is selected when the user "Save & Calculate's the company(s), it will update the company-level AND the fund-level scenarios with the entered values.

  • If a checkbox is not selected when the user "Save & Calculate's the company(s), it will only update the company-level scenario with the entered values

These check boxes indicate which values are or are not being rolled up to the fund level scenario metrics. They also allow users to experiment with different company scenarios without updated the overall fund's projections.

Navigating between funds

Each fund within a VC's instance is independent of the other funds. All Settings and default values are stand-alone for each of a customer's instances.

To navigate between funds, simply use the dropdown menu on the top-left of the page (just like on the Companies or Funds pages)