Fund Economics Tool
A single-page fund model for sizing check counts, power-law returns, and net LP/GP economics, without the quarterly cash flow detail of the full VC Model.
The Fund Economics Tool is a high-level fund forecast. You size the fund, set your portfolio construction, define a power-law return profile, and read out multiples and IRRs for the LP and GP.
It's the free, aggregate counterpart to the full Venture Capital Model. No quarterly cash flows, no time-series. Everything resolves over fund life. Three scenarios are built in.
How it's structured
Forecast holds the base case, with inputs and outputs on a single sheet. Forecast_1 and Forecast_2 are the conservative and high cases, same structure. Scenarios compares all three side by side. Plus Glossary, README, License, and Changelog.
Forecast inputs
Capital and fund assumptions (R9-R19)
Column D holds every primary input. Fund size sits at D9 (default $25M) and GP commit % at D10 (default 2%). Organizational expenses at D11 are $150k one-time, operational expenses at D12 are $100k/yr. Management fees % (D13) default to 2%, recycled capital % (D14) to 10%, and carry % (D15) to 20%. The period inputs (years) are new investment at D16 (4), mgmt fees at D17 (10), fund ops at D18 (10), and extension at D19 (0).
Portfolio construction (R26-R28)
Split allocation between new and follow-on (D26/E26), set average check size (D27/E27), and # of checks calculates at R28.
Return assumptions (R35-R39): power-law tiers
Four tiers, not a single average multiple:
| Tier | % capital | Avg gross multiple | Holding |
|---|---|---|---|
| Writeoff | 60% | 0x | 2 yr |
| Small | 20% | 1.5x | 3 yr |
| Medium | 10% | 5x | 4 yr |
| Large | 10% | 32x | 6 yr |
% capital and holding period are inputs. # investments and totals are formulas. This is the heart of the model. See portfolio construction.
Fund performance (R44-R60)
All formulas, split Total / LP / GP. The block covers called capital, fund expenses, management fees, recycled capital, and invested capital, then proceeds, carried interest, and distributions, then gross and net multiple, gross and net IRR, and the three reporting ratios PIC, DPI, and RVPI.
Scenarios
Forecast_1 and Forecast_2 are independent copies of Forecast. Change their assumptions to model conservative and high cases. The Scenarios sheet (R22-R25) compares multiples and IRRs across all three. R27-R28 are two sensitivity inputs (% change in # of high exits, % change in valuations) that drive the adjustments in the other two forecasts.
How to edit with AI
Open the workbook in Claude for Excel or connect the Hemrock MCP server at mcp.hemrock.com. See the prompt guide. Try: "add a fifth return tier for unicorns," "change check size by year," "model a 30% follow-on reserve."