New updates and improvements to Foresight
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Forecast
sheet to add a new Runway calculation, to calculate the number of months runway based on cash at the beginning of the month and future expenses. The model calculates runway two ways, one just a simple current cash divided by net burn that month, the second way looking at how long current cash lasts based on future cash flows, thus accounting for changes in net burn in the future. Both can be valuable in thinking about runway.Snapshot
, that is intended to help with analysis. Pick a date, and the model will report expected quarterly revenues, runway, cash in the bank at the end of the selected month, and create a table and chart showing major changes in cash over the previous 3 months and next three months from the selected date. Goal is to help with analysis, this is a first version and expect this to change over time.Relaunch of the Standard Financial Model for Services. The release of this model leverages two key additions from the last couple updates to the Standard Model - adding seperate billing structures, and introducing bundling of new signups to start of revenues - in adding the last features necessary to make the Standard Model a good fit for services and consulting businesses.
Announced the next dates for How to Model Venture Funds and Cap Table and Exit Waterfall Masterclass, as well as the launch of cap table short courses.
Updates to the Standard Financial Model:
Get Started
and Revenues
sheets, added new option for % billed upfront. Most cases it will be 100%, but in some cases (services, consulting, some enterprise contracts) there is a need for contracts to be paid at multiple times, on a non-every month or all billed upfront option. This implements a billing option where you can select to bill a % upfront in first month of contract, and the remainder at the end of the contract (on the last month of the contract)Updates to the Standard Financial Model:
Revenues
sheet to create a new "bundling" feature. line 114 calculates the conversions after the conversion lag, line 115 is a bundling input, line 116 calculates conversions after bundling. some businesses may make sales over time, but when the sales start may not be the same period, but may bundle them together into groups. an example is in education, where you often sign up users but don't start charging them until school is in session, for example. this input is designed to say "yes" or "no" using a "1" or "0", respectively, to say whether the conversions should flow through (a "1") or be bundled and held until the next event ("0" until the period for them to flow through into the next "1"). Kind of specific for certain businesses; if you don't understand it, then it doesn't apply to you :)Update to the Angel and Venture Fund Portfolio Tracking, updating the Actuals
sheet for a calculation of GP catchup, to handle the situation where there is a preferred return and not GP catchup (no impact if not using the preferred return input).
Update to the Venture Capital Model, Annual Forecast, Detailed Investment Strategy, adding in prebuilt scenario analysis. Video with how to think about scenario analysis and how to use it is linked at the product page and inside the model, and below.
Forecast
sheet row 7, so that it corrects the fiscal year for the Summary
sheet when the calendar year-end is not the same as the fiscal year-end. Previously, the Summary
sheet would sum up the years still using calendar years rather than fiscal years, a simple change to the formula on row 7 updates this.Hiring Plan
so it uses the timescale from Forecast
sheet, instead of recalculating the timescale. All sheets link to the timescale from Forecast
so that they are all consistent, previously this one was independent but now it's tied to the Forecast
sheet.Get Started
for the revenue calculations on Revenues
sheet so that the input for the starting number of revenue units is exposed on Get Started
. No change in model functionality, just a slight addition to make it clearer where to make that input.Launched the Talent Collective to help users find professionals to assist with financial models for startups and funds, business plans, valuations, and more. Details here.
Adding Search to the header to make it easier to find content and documentation specific to your needs.
New addition to product pages, adding category groupings (all venture capital models and all startup models) to reviews and ratings. Previously the ratings and reviews reported the ratings and reviews for each product and all products, now I've added a third section (in the middle of the ratings options) that displays the category-specific ratings and reviews for that product's category.
Created a Changelog (this page!) to track updates to products, classes, and offerings from Foresight. This page will highlight improvements to the models by surfacing the notes in each model's Changelog to the website, as well as broader updates about the company.
Kicked off Cohort 7 of the Cap Table and Exit Waterfall Masterclass. Next cohort to be scheduled soon.
Kicked off Cohort 3 of the How to Model Venture Funds. Next cohort to be scheduled soon.
New opportunity for financial modelers to be listed for referrals for projects. Details at Working with Foresight
— Foresight by @tdavidson (@ForesightHQ) April 13, 2023
Hosted a free, live workshop on modeling anti-dilution and their impact on cap tables. Understanding how down rounds impact dilution is an important area for companies in today's climate, I covered the theory and practice in modeling anti-dilution protection, with practical examples for you to use. Download the slides and spreadsheet here.
For more on modeling cap tables, I teach the Cap Table and Exit Waterfall Masterclass, a four session course that dives deeper into the topic.
New post covering How to Model Hardware Businesses using the Standard Financial Model.
Exit Waterfall
, introduced a new model settings at the top, to set the formula structure in a few situations. Basically, some aspects of the Exit Waterfall
create circulars that can be difficult for Excel and Google Sheets to calculate correctly (yes, spreadsheet programs have limitations, especially when it comes to circular references). By default, the model uses simpler formulas unless the more advanced options are required, for example for pari-passu or for down rounds (introduced in the previous version), in which cases the model turns on the more complicated formulas. Hopefully this makes it better for a wider range of people to use without issue, and still keeps the more advanced functionality for those that need it.Exit Waterfall
, changed the liquidation preference calculation for each share class to use the proceeds per share to common instead of the residual per share from the section above. The previous method did not work as well in conditions where the liquidation price per share decreased in future rounds. This method does make the calculations even more circular, but more robust for that situation.Cap Table
sheet.More at Modeling Anti-Dilution
Forecast
default (thank you to user for finding this).This was a webinar with Tactyc on how to use the forecast you created for fundraising your venture fund to actively manage your investing activity.
Tactyc is a platform for forecasting and scenario planning platform for venture capitalists. The software enables funds to construct, manage and forecast venture portfolios and empowers GPs to be more data-driven in capital and reserve allocations. Learn more at Tactyc.
Forecast
to add to the SUMIFS to also look for Cost of Sales, so that it didn't accidentally pick up advertising and marketing costs used for CAC analysis.Revenues
build (with additional assumptions on Get Started
) to allow for a % of new revenue units to select two different churn / repeat cycles with separate revenue assumptions. This allows you to segment new customers/users/subscribers/clients into two separate bases, allowing you to assume annual/monthly billing, for example.Statements
sheet to include previous period, so that the formulas are change per period + previous period (Thank you to user for finding this; while the Starter Model shares the same build for the Statements
, this was only in the Standard Model).Get Started
, E26 to calculate the number of follow-on checks differently for the Venture Investor Model. No change to returns or cash flows, no other impact to the model other than reporting the number of follow-on checks differently.Forecast
sheet to include a new input line for "Changes in Accounts Receivable", and edited the accounts receivable calc to use that amount if used in the model. What this does is make it easier to use the actual changes in accounts receivable in the model; previously you had to compute cash collected to back into the change in accounts receivable, now it will do it directly using the change in AR you calculate from your actual balance sheetForecast
sheet to correct an error introduced in previous version. Simple to change by adjusting those two lines.Key Metrics
Sheet (focused on SaaS businesses) and a few new SaaS-specific metrics on the Forecast sheet. Added new Hiring Plan
sheet to aid in detailing a hiring plan by putting it on a separate sheet.