This guide will help you in using the round modeling tool to test financial scenarios.
Once you have logged into your account, click on the “Round Modeling” on the left hand side under “Modeling”.
After you have entered the “Round Modeling”, the following display will appear. The interface was made to be user friendly and compact to allow easy reference to all the relevant data.
The top has inputs for data of your round modeling. Below these are several different options to customize your scenarios. There are displays for key figures for the pre-money figures, the new investment, and post-money figures. These is also a pie graph according to each share class.
The table below summarizes the pre-money picture of the company’s share classes. This should be identical to the cap table of the company.
This can also be displayed as the post-money values, including the new investment and option pool. This will show the total effect of dilution on the cap table of the company.
Going back to the top of the screen, the 4 value inputs are shown on the app as below:
Each value of the round modeling has been custom made to assist with the exit scenarios of the company.
The top line with four inputs represent:
- Date of Investment: Date of new investment
- Pre-Money valuation: Value of the company before the new investment.
- Post-Money Option Pool: Percentage of new option pool created.
- Investment Amount: Amount of the new investment.
Underneath these are further options for you to customize the variables in your round model.
The different options here are as:
- “Basic” version of new investment: One new investment into the company.
- “Advanced” version of new investment: Multiple new investments into the company.
- Conversion rate (on Preferred Shares): Inclusion of conversion rates on preferred shares.
- Convertible Note Interest (on Convertible Notes): Inclusion of interest on convertible notes.
- Pre-Money (Convertible Basis): Conversion of notes before the new investment.
- Post-Money (Convertible Basis): Conversion of notes after the new investment.
If you choose the “basic” version of the new investments, then only one investment amount will appear as the input box. This value will also appear simply as “New Investment” in the table for its total value.
With the “Advanced” version of new investment, you can set multiple new investments for the round modeling. From here you can add further details such as the shareholder, security name, conversion rate (if any), and investment amount. You can choose the new investment for an existing shareholder, or a new investor within your scenario.
This “advanced” feature allows users to include multiple new investments to not only investors outside the company, but also for those existing shareholders who would like to invest more into the company.
This round modeling will assist you in calculating the dilution of the captable from new investments and a new option pool. This will be of great use for companies with more complex cap tables, or for those who want more customization in their financial analysis tools.