I am trying to replicate Union Square Ventures Fund #1 model.
A number of assumptions are given and the outcomes are listed. I have copied these into google sheets.
I am not sure exactly how IRR is calculated.
In order to compute
Cash Out, I am assuming
Average Initial Investment,
Average Follow On Investment,
Inital Investments per Year,
Winners, Losers, Money Back,
Rounds Per Investment, and
Deals Per Stage are used:
Cash-Out Year N = (
Average Investment Amount *
Number of Initial Investments for Year N) + (
Average Follow On Investment /
Rounds Per Investment)
In order to to compute
Cash In, I assuming
Winners, Money Back, Losers,
Average Return Multiple,
Average Holding Period and
Average Total Investment are used:
Cash-In Year N =
Average Return Multiple *
(Average Initial Investment + Average Follow On Investment) [with lag of N - Average Holding Period]
However, I am unsure mostly on how on each year the number of each type of deal
concept, trial, revenue and outcomes
winners, money back, losers are inputed/factored in.
Equation 1) and 2) above are my guesswork, and I would appreciate advice on how to amend and implement them.