Venture Capital Returns Model
Originally published: 26/08/2021 08:16
Publication number: ELQ-31402-1
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Venture Capital Returns Model

The Venture Capital Returns Model is used to provide an analysis into an investment return for a VC fund.

The Venture Capital Returns Model is used to provide an analysis into an investment return for a VC fund. This model includes a distribution waterfall and IRRS and NPVs for all partners in the fund and the fund in total.

The model starts with an Assumptions Section where you can enter in the amount raised, expected return and net cash flows distributed. The two cells highlighted in gray are tied to the Sensitivity Analysis at the bottom. The Venture Capital Waterfall breaks down the Equity Contribution and the distributions to the LP and GP investors. The allocation percentages for equity invested and cash flow distributed can be adjusted in the GP/LP Structure box. Accrued Return is based on the IRR for each tier. After that, the model contains Net Present Value (NPV) and Internal Rate of Return (IRR) for each investor and the fund in total. Lastly, there is a sensitivity analysis for LP IRR based on Cash Invested and YoY Return from the Assumptions Section.

All cells in blue font are input cells where custom information can be entered. All cells in black font are formulas set to streamline the model. Sections are grouped to allow for different sections to be viewed at different times.

This Best Practice includes
1 Excel Template 1 PDF File

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Further information

To provide an Excel template for any venture capital investor looking into a return on their investment

Venture Capital investors looking into their returns on a tiered distribution structure


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