DocsVenture Capital

Modeling Portfolio Construction

How to model portfolio construction in the venture fund models

*Read more about portfolio construction at How to model a venture capital fund

Portfolio construction is the process of creating your portfolio strategy, check sizes, follow on reserves, and expectations around valuations, ownership, and dilution over time. There is no single right way to approach portfolio construction. The “best” way to forecast a portfolio depends on your specific needs. More detail may sound appealing, but requires more assumptions and may not be necessary for your needs. Ultimately the question to ask is how you plan on using your model, what decisions you will make with it, and your ability to create, use, and manipulate the important decisions in your model.

Part II

Part III, focusing on modeling multi-entry point investment strategies and how to either average the strategies or model them individually.

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