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    Venture Studio

    Uploaded by

    Anil Kumar Prasanna
    The document compares the cash flows, returns, and fees for different investment strategies (4X, 5X, 7X, 10X, 100X) over 5 or 10 year lock-in periods. It shows that higher risk strategies (e.g. 100X) have the potential for much larger returns (CAGR over 50%) but also more downside risk, while more conservative strategies (e.g. 4X) have lower returns in the 15-25% range but more stable outcomes. The document also outlines different fee structures for the investment managers including management fees and profit participation rates.

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    Venture Studio

    Uploaded by

    Anil Kumar Prasanna
    305 views6 pages
    The document compares the cash flows, returns, and fees for different investment strategies (4X, 5X, 7X, 10X, 100X) over 5 or 10 year lock-in periods. It shows that higher risk strategies (e.g. 100X) have the potential for much larger returns (CAGR over 50%) but also more downside risk, while more conservative strategies (e.g. 4X) have lower returns in the 15-25% range but more stable outcomes. The document also outlines different fee structures for the investment managers including management fees and profit participation rates.

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    VentureStudio

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    The document compares the cash flows, returns, and fees for different investment strategies (4X, 5X, 7X, 10X, 100X) over 5 or 10 year lock-in periods. It shows that higher risk strategies (e.g. 100X) have the potential for much larger returns (CAGR over 50%) but also more downside risk, while more conservative strategies (e.g. 4X) have lower returns in the 15-25% range but more stable outcomes. The document also outlines different fee structures for the investment managers including management fees and profit participation rates.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    305 views6 pages

    Venture Studio

    Uploaded by

    Anil Kumar Prasanna
    The document compares the cash flows, returns, and fees for different investment strategies (4X, 5X, 7X, 10X, 100X) over 5 or 10 year lock-in periods. It shows that higher risk strategies (e.g. 100X) have the potential for much larger returns (CAGR over 50%) but also more downside risk, while more conservative strategies (e.g. 4X) have lower returns in the 15-25% range but more stable outcomes. The document also outlines different fee structures for the investment managers including management fees and profit participation rates.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    of 6
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    The document compares returns from venture capital funds across different investment sizes (4X-100X) and time periods (5-10 years). It also analyzes the operational costs and fee structures for different fund models.

    The fee models considered include management fee plus profit cut-off, management fee plus carried interest, and management fee plus annual management fee plus profit cut-off.

    The operational costs and profit sharing structures are analyzed for traditional, venture studio, and safe play fund models.

    4X 5X 7X

    Amount Raised $10,000,000.00 $10,000,000.00 $10,000,000.00


    Target Return $40,000,000.00 $50,000,000.00 $70,000,000.00
    Lock in Period 5 Years 5 Years 5 Years

    Year Cash Flow 4X 1 Cash Flow 4X 2 Cash Flow 4X 3


    2021 -$10,000,000.00 -$10,000,000.00 -$10,000,000.00
    2022 $0.00 $0.00 $0.00
    2023 $0.00 $0.00 $0.00
    2024 $0.00 $0.00 $0.00
    2025 $23,000,000.00 $22,000,000.00 $19,500,000.00

    Fee Models Management Fee Profit Cutoff (4X) Total


    2% M - 20% P $1,000,000.00 $6,000,000.00 $7,000,000.00
    1% M - 25% P $500,000.00 $7,500,000.00 $8,000,000.00
    0% M - 35% P $0.00 $10,500,000.00 $10,500,000.00
    5% MAP - 15% P $0.00 $5,000,000.00 $5,000,000.00
    10% MAP - 20% P $0.00 $7,000,000.00 $7,000,000.00
    20% MAP - 30% P $0.00 $11,000,000.00 $11,000,000.00

    Year Cash Flow 5X 1 Cash Flow 5X 2 Cash Flow 5X 3


    2021 -$10,000,000.00 -$10,000,000.00 -$10,000,000.00
    2022 $0.00 $0.00 $0.00
    2023 $0.00 $0.00 $0.00
    2024 $0.00 $0.00 $0.00
    2025 $31,000,000.00 $29,500,000.00 $26,000,000.00

    Fee Models Management Fee Profit Cutoff (5X) Total


    2% M - 20% P $1,000,000.00 $8,000,000.00 $9,000,000.00
    1% M - 25% P $500,000.00 $10,000,000.00 $10,500,000.00
    0% M - 35% P $0.00 $14,000,000.00 $14,000,000.00
    5% MAP - 15% P $0.00 $6,500,000.00 $6,500,000.00
    10% MAP - 20% P $0.00 $9,000,000.00 $9,000,000.00
    20% MAP - 30% P $0.00 $14,000,000.00 $14,000,000.00

    Year Cash Flow 7X 1 Cash Flow 7X 2 Cash Flow 7X 3


    2021 -$10,000,000.00 -$10,000,000.00 -$10,000,000.00
    2022 $0.00 $0.00 $0.00
    2023 $0.00 $0.00 $0.00
    2024 $0.00 $0.00 $0.00
    2025 $47,000,000.00 $44,500,000.00 $39,000,000.00

    Fee Models Management Fee Profit Cutoff (7X) Total


    2% M - 20% P $1,000,000.00 $12,000,000.00 $13,000,000.00
    1% M - 25% P $500,000.00 $15,000,000.00 $15,500,000.00
    0% M - 35% P $0.00 $21,000,000.00 $21,000,000.00
    5% MAP - 15% P $0.00 $9,500,000.00 $9,500,000.00
    10% MAP - 20% P $0.00 $13,000,000.00 $13,000,000.00
    20% MAP - 30% P $0.00 $20,000,000.00 $20,000,000.00

    Year Cash Flow 10X 1 Cash Flow 10X 2 Cash Flow 10X 3
    2021 -$10,000,000.00 -$10,000,000.00 -$10,000,000.00
    2022 $0.00 $0.00 $0.00
    2023 $0.00 $0.00 $0.00
    2024 $0.00 $0.00 $0.00
    2025 $70,600,000.00 $66,800,000.00 $58,500,000.00

    Fee Models Management Fee Profit Cutoff (10X) Total


    2% M - 20% P $1,400,000.00 $18,000,000.00 $19,400,000.00
    1% M - 25% P $700,000.00 $22,500,000.00 $23,200,000.00
    0% M - 35% P $0.00 $31,500,000.00 $31,500,000.00
    5% MAP - 15% P $0.00 $14,000,000.00 $14,000,000.00
    10% MAP - 20% P $0.00 $19,000,000.00 $19,000,000.00
    20% MAP - 30% P $0.00 $29,000,000.00 $29,000,000.00

    Year Cash Flow 100X 1 Cash Flow 100X 2 Cash Flow 100X 3
    2021 -$10,000,000.00 -$10,000,000.00 -$10,000,000.00
    2022 $0.00 $0.00 $0.00
    2023 $0.00 $0.00 $0.00
    2024 $0.00 $0.00 $0.00
    2025 $790,000,000.00 $741,500,000.00 $643,500,000.00

    Fee Models Management Fee Profit Cutoff (100X) Total


    2% M - 20% P $2,000,000.00 $198,000,000.00 $200,000,000.00
    1% M - 25% P $1,000,000.00 $247,500,000.00 $248,500,000.00
    0% M - 35% P $0.00 $346,500,000.00 $346,500,000.00
    5% MAP - 15% P $0.00 $149,000,000.00 $149,000,000.00
    10% MAP - 20% P $0.00 $199,000,000.00 $199,000,000.00
    20% MAP - 30% P $0.00 $299,000,000.00 $299,000,000.00
    10X 100X
    $10,000,000.00 $10,000,000.00
    $100,000,000.00 $1,000,000,000.00
    7 Years 10 Years

    Cash Flow 4X 4 Cash Flow 4X 5 Cash Flow 4X 6


    -$10,000,000.00 -$10,000,000.00 -$10,000,000.00
    $0.00 $0.00 $0.00
    $0.00 $0.00 $0.00
    $0.00 $0.00 $0.00
    $25,000,000.00 $23,000,000.00 $19,000,000.00

    Returns to Investor Group (4X) CAGR (4X) IRR (4X)


    $23,000,000.00 18.13% 23.15%
    $22,000,000.00 17.08% 21.79%
    $19,500,000.00 14.29% 18.17%
    $25,000,000.00 20.11% 25.74%
    $23,000,000.00 18.13% 23.15%
    $19,000,000.00 13.70% 17.41%

    Cash Flow 5X 4 Cash Flow 5X 5 Cash Flow 5X 6


    -$10,000,000.00 -$10,000,000.00 -$10,000,000.00
    $0.00 $0.00 $0.00
    $0.00 $0.00 $0.00
    $0.00 $0.00 $0.00
    $33,500,000.00 $31,000,000.00 $26,000,000.00

    Returns to Investor Group (5X) CAGR (5X) IRR (5X)


    $31,000,000.00 25.39% 32.69%
    $29,500,000.00 24.16% 31.06%
    $26,000,000.00 21.06% 26.98%
    $33,500,000.00 27.35% 35.29%
    $31,000,000.00 25.39% 32.69%
    $26,000,000.00 21.06% 26.98%

    Cash Flow 7X 4 Cash Flow 7X 5 Cash Flow 7X 6


    -$10,000,000.00 -$10,000,000.00 -$10,000,000.00
    $0.00 $0.00 $0.00
    $0.00 $0.00 $0.00
    $0.00 $0.00 $0.00
    $50,500,000.00 $47,000,000.00 $40,000,000.00

    Returns to Investor Group (7X) CAGR (7X) IRR (7X)


    $47,000,000.00 36.28% 47.24%
    $44,500,000.00 34.79% 45.24%
    $39,000,000.00 31.28% 40.53%
    $50,500,000.00 38.25% 49.91%
    $47,000,000.00 36.28% 47.24%
    $40,000,000.00 31.95% 41.42%

    Cash Flow 10X 4 Cash Flow 10X 5 Cash Flow 10X 6


    -$10,000,000.00 -$10,000,000.00 -$10,000,000.00
    $0.00 $0.00 $0.00
    $0.00 $0.00 $0.00
    $0.00 $0.00 $0.00
    $76,000,000.00 $71,000,000.00 $61,000,000.00

    Returns to Investor Group (10X) CAGR (10X) IRR (10X)


    $70,600,000.00 32.21% 63.01%
    $66,800,000.00 31.17% 60.77%
    $58,500,000.00 28.70% 55.52%
    $76,000,000.00 33.61% 66.04%
    $71,000,000.00 32.31% 63.24%
    $61,000,000.00 29.48% 57.16%

    Cash Flow 100X 4 Cash Flow 100X 5 Cash Flow 100X 6


    -$10,000,000.00 -$10,000,000.00 -$10,000,000.00
    $0.00 $0.00 $0.00
    $0.00 $0.00 $0.00
    $0.00 $0.00 $0.00
    $841,000,000.00 $791,000,000.00 $691,000,000.00

    Returns to Investor Group (100X) CAGR (100X) IRR (100X)


    $790,000,000.00 54.80% 198.13%
    $741,500,000.00 53.82% 193.45%
    $643,500,000.00 51.65% 183.23%
    $841,000,000.00 55.77% 202.83%
    $791,000,000.00 54.82% 198.23%
    $691,000,000.00 52.74% 188.32%
    TRADITIONAL MODEL

    OPEX Annual Cost Profit Sharing % Equity Range UPSIDE


    CEO/COO $40,000.00 70% 26-40% Medium
    CFO/Controller/Accountant $40,000.00 20%
    Associate/Principal $20,000.00 10%
    Legal/Compliance/Tax $25,000.00
    Total $125,000.00
    Buffer 20%
    Annual Total Costs $150,000.00 Min Fund Size $7,500,000.00 55 crore

    VENTURE STUDIO IDEALLY INVEST IN BUSINESS WITH HIGH UPSIDE & LOW DOWNSID

    OPEX Annual Cost Profit Sharing % Equity Range UPSIDE


    CEO/COO $40,000.00 55% 76 % - 90 % High
    CFO/Controller/Accountant $40,000.00 20%
    CTO $40,000.00 10% Need tech subscription to survive.
    Enginnering $100,000.00 10% High initial cost operational costs d
    Associate/Principal $20,000.00 5% Possibility of generating Intellectua
    Legal/Compliance/Tax $25,000.00 Can support other funds running in
    Total $265,000.00 Wider moat and stickiness
    Buffer 20%
    Annual Total Costs $318,000.00 Min Fund Size $15,900,000.00 116 crore

    SAFE PLAY
    OPEX Annual Cost Profit Sharing % Equity Range UPSIDE
    CEO/COO $60,000.00 50% 5-15% High
    CFO/Controller/Accountant $60,000.00 25%
    Associate/Principal $40,000.00 15%
    Legal/Compliance/Tax $40,000.00
    Total $200,000.00
    Buffer 20%
    Annual Total Costs $240,000.00 Min Fund Size $12,000,000.00 90 crore
    DOWNSIDE GAP ANALYSIS TRADITIONAL STUDIO MODEL SAFE PLAY
    Low 2% M - 20% P $250,000.00 -$590,000.00 -$200,000.00
    1% M - 25% P -$250,000.00 -$1,090,000.00 -$700,000.00
    0% M - 35% P -$750,000.00 -$1,590,000.00 -$1,200,000.00
    5% MAP - 15% P -$750,000.00 -$1,590,000.00 -$1,200,000.00
    10% MAP - 20% P -$750,000.00 -$1,590,000.00 -$1,200,000.00
    20% MAP - 30% P -$750,000.00 -$1,590,000.00 -$1,200,000.00

    UPSIDE & LOW DOWNSIDE

    DOWNSIDE
    Low

    ech subscription to survive.


    itial cost operational costs drop down as years roll by
    lity of generating Intellectual Property
    pport other funds running in traditonal model and safe play giving you insights to a larger market and better deals
    moat and stickiness

    DOWNSIDE
    Medium

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