Venture Capital Model

The model's behavior is steered by a compact set of operating drivers. A scenario selector on the Assumptions sheet lets you toggle between Base, Bull, and Bear cases.

• What changes between scenarios is intentionally narrow: gross multiple on invested capital for winners, the write-off rate, and the partial-return percentage. Everything else—fund size, fee terms, exit timing parameters, waterfall structure—remains constant across scenarios.
• This design keeps the scenario comparison clean and interpretable: you see the impact of return assumptions and loss rates without confounding shifts in fund mechanics. All inputs are tagged as assumptions, and downstream sheets reference only the active, resolved drivers, so switching scenarios updates outputs consistently.

Capital deployment begins with management fees and a fixed investable base. Fees are 2.0% of committed capital during the five-year investment period, then 1.5% during harvest.

• Half of fees are recycled, reducing net drag. The investable base equals fund size minus lifetime net fees, and a deployment ramp (15/25/25/20/15%) is applied to that fixed base so the fund fully deploys without circular references.
• Capital calls combine period fees and deployment, capped to never exceed fund size. On the returns side, exit timing uses a normalized triangular weight so the full cost basis exits by year ten.

Unrealized holdings are not marked at exit multiples immediately; instead, a markup progression ramps carrying value from 1.0x cost toward the blended exit multiple as the portfolio ages. This produces the characteristic J-curve: early TVPI below 1.0x from fee drag and cost-basis holdings, then rising as markups and realizations accumulate.

Distributions follow a European whole-fund waterfall with four cumulative tiers, each differenced into a period flow and floored at zero to prevent negative distributions. Tier one returns capital to LPs.

• Tier two pays an 8% compounded preferred return on called capital. Tier three is a full GP catch-up until the GP holds its carry share of profit above the hurdle.
• Tier four splits residuals 80% to LPs and 20% to the GP as carried interest. A clawback reserve row shows the excess of cumulative GP carry over entitled carry; for a European whole-fund structure this is typically near zero but is displayed for completeness.

This sequencing means LPs recover capital and a preferred return before the GP participates meaningfully, which shapes early net cash flows and the depth of the J-curve.

The dashboard surfaces KPI cards for net IRR, TVPI, DPI, RVPI, gross IRR, and cumulative GP carry, alongside a year-by-year J-curve table tracking TVPI and DPI. Fund performance sheets compute these multiples, LP returns, GP economics, fund cash flows, and LP net present value.

• A checks sheet validates identities every year: waterfall distributions equal exit proceeds, TVPI equals DPI plus RVPI, period distributions are never negative, cumulative distributions are monotonic, deployment stays within the investable base, and exit cost basis never exceeds cumulative invested. These checks make the model self-auditing.
• Practically, the template suits evaluating how fee structures, exit pacing, and scenario assumptions interact to shape LP outcomes. Note that per-vintage cohort modeling is out of scope, so portfolio construction is fund-level rather than vintage-level.