Marketplace Subscription Model

Description
This model makes it easy to produce financial statements and run various cash flow analysis reports for a business that facilitates transactions between buyers and sellers for a fee as well as offers users the ability to pay a monthly fee in return for improved experience. The improved experience can come in many forms, such as lower marketplace fees.

The model has a clear separation of subscriber cohorts vs. non-subscriber cohorts. There are subscription tiers that can be configured, all with their own pricing, retention, and growth. The model assumes all subscribers will be subject to the activity assumptions of the marketplace and there are separate activity assumptions for subscription vs. non-subscription users.

Users can move from free to subscribers per a defined percentage that can be altered monthly over the life of the model.

This has all the bells and whistles for key metric reporting, customer lifetime value, customer acquisition costs, LTV to CaC ratio, and months to pay back acquisition cost for the subscription pool.

Output reports include a fully connected 3-statement model, DCF Analysis, and IRR summary. The model can be used for a single operator that is investing all their money into the operation or a joint venture with inside and outside investors with their relevant contribution and distribution rates. An IRR will display for each as well as a DCF Analysis.

I've included assumptions for the option to show an exit based on a defined revenue multiple.

General marketplace activity assumptions include the average active users that transact per month, the average transactions per month, the average transaction value, and the average fees charged by the marketplace to faciliate these transactions. 

Growth of the marketplace and subscribers can be defined in a few ways. For the marketplace tab, you can input monthly ad spend in each month over the 120-month period as well as the expected monthly traffic, and conversion rate of ads vs. organic traffic as well as the average lifetime of a marketplace user (defined in months).

The retention curves can be hard coded by whatever curve your data suggests, but by default the curves will be linear based on the retention at renewal for the subscriber pools and the expected average lifetime of marketplace users. Linear just means the same % of the initial cohort is lost each month or at each renewal period if the subscriber contracts are longer than 1 month.

For the subscription tiers, you can easily configure varying contract lengths, for example you could have a month-to-month pricing option, a bi-annual pricing option, and an annual pricing option. The churn implications of that are important to model right and that is the quality you get with this template.

This template is also included in two bundles:
- All Models Bundle: https://www.eloquens.com/tool/P8Y4TX4v/finance/financial-forecasting-models/financial-models-120-useful-and-usable-logic
- SaaS / Subscription Models: https://www.eloquens.com/tool/wmyQI0eE/finance/venture-capital/the-complete-venture-capital-bundle