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Private Markets

3 tools in the Investing area.

Fund Waterfall

How a private fund's distributions are split between its investors (limited partners) and its manager (general partner). Enter the committed capital, a short table of dated contributions and distributions, the preferred return, the carried interest, the catch-up and the manager's own commitment; the page runs the whole-fund (European) waterfall tier by tier (return of capital, preferred return, catch-up, residual split) and shows the investors' net return (IRR) against the gross return, the manager's carry and the multiples TVPI, DPI and RVPI. Advanced mode adds a management fee, a simple-interest hurdle, a second carry tier and the deal-by-deal (American) waterfall with its clawback. A calculator for education and analysis, not investment advice.

1 worked example reproduced, listed on the tool page.

Venture Capital Method

The value a venture investor's target return implies for a young company. Enter the investment, the value expected at exit (or exit-year revenue or earnings times a multiple), the years to exit, the target return and the dilution expected from later rounds; the page works back, step by step, to the ownership the investor needs and to the post-money and pre-money valuation, the price per share and the new shares issued, and shows how the valuation moves with the target and the exit value and what the deal returns if the exit is lower. Advanced mode adds later rounds one by one with option-pool top-ups, three probability-weighted scenarios (the First Chicago method) and a comparison of liquidation preferences. A calculator for education and analysis, not investment advice.

1 worked example reproduced, listed on the tool page.

Cap Table and Dilution

Venture financing model: the fully diluted capitalization table after each priced round, with safes and convertible notes converting at the first round (post-money and pre-money valuation caps, discounts, note interest), the option pool increase counted before or after the money and the effective pre-money valuation it leaves the existing holders, pro rata purchases, broad-based weighted average and full ratchet anti-dilution on a down round, each holder's dilution, and an exit waterfall with liquidation preferences in order of seniority, participation and participation caps, option strike prices and the conversion decision of every preferred series solved as a consistent set, for one exit value and for a sweep of exit values. The post-money safe examples of the Y Combinator user guide load from a dropdown and are reproduced to the printed digits.

1 worked example reproduced, listed on the tool page.

Other Investing sections

Economy and Rates · Company Financials · Stock Valuation · Portfolio and Risk · Bonds · Options · Saving and Planning · Mergers and Buyouts