New updates and improvements to Foresight

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Anti-Dilution Workshop

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.

How to model hardware and physical product businesses

  • On 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.

  • On 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.

  • Adding prebuilt anti-dilution protection to the default Cap Table sheet.
  • This is a beta release of the feature, and will change based on feedback, but aims to add in full ratchet and weighted average (broad-based and narrow-based) if selected and if applicable based on new share prices.
  • The feature is not fully automatic, as you will need to select the type of anti-dilution protection and input the purchase price from the previous equity round.
  • This calculates the same protection for all preferred shareholders, although if shareholders have different original purchase prices their anti-dilution protection will be different.
  • I do expect to change the approach to make it more flexible and automatic based on user feedback and use.

More at Modeling Anti-Dilution

  • Fixed estimated taxes payable to use Taxes instead of Salaries lines, row 420 and 421 in the current Forecast default (thank you to user for finding this).

Using Your Venture Fund Forecast to Manage Investments

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.

  • Fixed COGS calculation in the inventory section (row 449 in the current default) on 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.

  • Extended the 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.
  • Edited Accounts Payable and Accrued Liabilites on Balance Sheet on 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).

  • Edited 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.