# Fund Economics Tool

Simple model for forecasting overall returns of a venture fund, to help understand overall fund assumptions and returns.

4.9(21)3,760 downloads

Venture Capital Model, Overall Fund, by Foresight (Make a copy or Download) - Google Sheets - 23 September 2022

## Highlights

Get the shape of fund economics. Average check size, capital allocation, expected return multiple, and out comes Gross/Net IRR, Multiple, RVPI, DPI, TVPI. No operational-level cash flow modeling. The simplest way to think about a fund strategy before building a real model.

## What you'll do with it

Sketch the shape of a fund. Set fund size, average check, follow-on allocation, and expected gross return multiple, and see what that produces in fund-level metrics. Use it to test a thesis before committing to a full forecast, or to teach someone how fund economics actually work.

It does _not_ forecast cash flows over time, model timing of capital calls and distributions, or build financial statements. For that, move up to the [Venture Capital Model](https://www.hemrock.com/venture-fund-model).

## Edit with AI

Every cell open. Documented row by row. Built to be edited.

1. **[Context primer](https://www.hemrock.com/docs/ai?template=venture_fund)**, paste into Claude or ChatGPT before any change.
2. **[Prompt guide](https://www.hemrock.com/docs/ai?template=venture_fund)**, ready-made prompts for setup and quick scenarios.
3. **[Connect MCP](https://www.hemrock.com/mcp)**, Claude Desktop or Claude.ai pulls model context automatically.
4. **Verify before trusting**, sanity-check prompts catch wrong references and confused metrics.

## When to use this vs. the full model

|  | Fund Economics Tool | Venture Capital Model |
| --- | --- | --- |
| What it computes | Total fund returns | Quarterly cash flows + returns |
| Portfolio construction | Average investment | Graduation rates, follow-ons, proratas |
| Financial statements | No | Yes |
| Preferred return / GP carry | No | Yes |
| Management company budget | No | Yes |
| Best for | Sketching a thesis | Modeling a real fund |
| Price | Free | Paid |

Background reading: [How to Model a Venture Capital Fund](https://www.hemrock.com/model-venture-capital-fund) · [Portfolio construction](https://www.hemrock.com/docs/portfolio-construction)

## Documentation

- [How to model a venture capital fund](https://www.hemrock.com/model-venture-capital-fund)
- [Portfolio construction](https://www.hemrock.com/docs/portfolio-construction)
- [Bring your own model](https://www.hemrock.com/byom)

## Ratings

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