How to Model Venture Funds
Hybrid course for angels, syndicate leads, and venture investors to learn how to model venture funds.
This course is no longer available.
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Course overview
Understand how the economics of venture funds work
Starting a fund, syndicate, or getting started with angel investing? It's important to understand how to budget for investments and forecast returns for your limited partners. Come for the education, leave with a model you can use.
The three sessions can be joined live or watched on your own time. All students will receive the slides, the example spreadsheet, the case study, and the recording of the full workshop, and all of the materials can be viewed on your own time.
Who this course is for
01
Emerging general partners and junior venture capitalists working on a venture capital fund.
02
Syndicate leads and angel investors wanting to structure their investing tracking and reporting.
03
Founders or executives looking to understand how the economics of venture funds work.
Key outcomes
Model fund capital budgeting and deployment
How to use assumptions around fund size, management fees, and expenses to create a forecast of called capital, expenses, and invested capital over time.
Create a portfolio construction model
Cover a few common ways of approaching portfolio construction models and discuss the pros and cons of each, and how to use them in our forecast of investments and proceeds. We will cover simple and complicated ways of forecasting portfolios.
How to model proceeds and distributions
Using our forecast of invested capital and our portfolio construction logic, we will cover how to create a forecast of proceeds from investments and a waterfall of distributions, including preferred returns, GP catchups, and carried interest.
Present key metrics and key reports
Using our forecast of fund cash flows, we will introduce how to calculate unrealized gains and residual values, using our portfolio construction approach to forecast the underlying changes in value in the portfolio not captured in our realized cash flow forecasts.
Bonus: Model a management company
This is a bonus session using prerecorded video, to cover how to model the forecasted revenues and expenses for the management company. If time, will address questions and comments in the session.
Course syllabus
3 live sessions • 13 lessons
Week 1
- 📄
Prework for module
- 📄
Video, slides and spreadsheet for module
- 📄
Addendum: Understanding Unrealized changes in Portfolio
Feb
22
How to model fund flows
How to model fund flows
How to build out a schedule of capital calls, investments, proceeds, and distributions to limited partners and general partners
Week 2
- 📄
Prework for module
- 📄
Video, slides and spreadsheet for module
Feb
29
How to model portfolio construction
How to model portfolio construction
We will start by building cap tables to understand discrete investment scenarios, and use that to understand the different approaches to modeling portfolio construction.
Week 3
- 📄
Prework for module
- 📄
Video, slides and spreadsheet for module
Mar
7
How to model performance metrics
How to model performance metrics
Wrapping up our model, we will learn how to calculate key fund performance metrics and use them to create scenarios and communicate fund performance.
Bonus
- 📄
Budgeting the Management Company of a Venture Capital Fund
- 📄
How to Make a Budget for a Rolling Fund
- 📄
Example spreadsheet for modeling a management company
- 📄
Case Study
- 📄
More Case Studies
- 📄
Example model to use for case studies
How to model a management company
Bonus session using prerecorded video, and will address questions and comments in the Q&A session.
Practice Case Studies
This section is intended for you to work on the case study, review materials, and ask questions post-workshop.
What students are saying
Meet your instructor
Taylor Davidson
Taylor Davidson
Founder and Managing Director, Foresight
Taylor Davidson is the founder of Foresight, which helps entrepreneurs use financial models for business decisions.
Through his template financial models and strategic advisory services, he has helped over 48,000 entrepreneurs from 116 countries on financial planning, projections, fundraising, valuations, and business strategy.
Taylor has also worked with over 600 angel investors and venture funds on investment strategy, portfolio tracking, capital planning, and fundraising.
He created this workshop to help first-time founders and junior venture capitalists learn the fundamentals of modeling cap tables.
He created the Cap Table and Exit Waterfall Masterclass to help founders and VCs learn how to understand and build cap tables and exit waterfalls for their financing rounds.
He partnered with Chris Wattig to create Finance for Founders to help founders learn how to build an FP&A function at their companies.
Contact him at hello@foresight.is or @tdavidson on Twitter.
Course Schedule
3-4 hours per week
Self-paced lessons
1.5 hours per week
1 module per week with slides, spreadsheet, background readings. Watch the 1.5 hour recording of a class on the material, or join each module's live class for Q&A and interaction.
Bite-sized projects
1 hour per week
Practical exercises for you to apply what you learn in class, with a case study to practice building a complete model. The time commitment is manageable for busy professionals, with actionable takeaways to use in your business.
Live Sessions
1.5 hours per week
Live session with Taylor and the rest of the cohort for going over the material, Q&A, and exercises to dive deeper into that week's material.
Thursdays at 12 PM Eastern time