Excel Modeling: Case Study
Future Vision Fund is a venture capital firm investing in start-up companies. They’ve reached the end of their fund life-cycle and now want to distribute the proceeds to their investors.
There are three investors – General Partner (Investor A), DMPC (Investor B) and MSPC (Investor C).
The distribution ratio depends upon the drawdown amount for MSPC.
Till the time distribution proceeds for MSPC are 1.5 times drawdown for MSPC, the fund amount would be distributed in the Preliminary Ratio – 10%, 40%, 50%.
Then, from the time distribution proceeds for MSPC exceed 1.5 times drawdowns for MSPC and till the time they are equal to 1.7 times drawdown for MSPC, the remaining fund amount would be distributed in the Secondary Ratio – 30%, 30%, 40%.
Then, the remaining fund amount would be distributed in the Tertiary Ratio – 50%, 40%, 10%.
Create a model that calculates the distribution proceeds for each investor, given the following inputs:
1. MSPC Drawdowns
2. Total Fund Amount to be distributed
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