Ultimate Venture Capital: How to model investment rounds from Udemy

What I have learned over the years is that most people, from startup founders to investors don't understand the cap table, and consequently their ownership, on a deep level.

Most founders lack the knowledge to model out future rounds and don't grasp key economic terms when negotiating their term sheet. This course will change that.

Most investors don't know how the waterfall will work in a liquidity event and what the liquidation preference really means to their overall return.

So, I created this course to teach the breadth of professionals involved in early stage capital how this all really works. It is exhaustive and touches on every key point I know that is economic to a deal. Learning how to plan and understand the ownership of your company is critical to keeping motivation and maximizing returns.

The course is taught through excel. It is hands on, get dirty, struggle to understand until the lightbulb goes off and you get it right. I teach it the exact way that i learn, which is by doing. It is step by step with commentary on the specifics.

What it is not, however, is a course in excel. While their are not overly complicated functions involved, you should have a base knowledge or you will get frustrated.

The value of this course is what it will save you in attorney's fees, equity, and potentially greater returns on your investments.You can learn how to project and manage your growth and join a community of people going through the same struggles.

What's inside

Learning objectives

Build a cap table and waterfall analysis from scratch
Learn the actual numbers behind investment terms
Know the direct impact on ownership percentages of every major term sheet provision
Build private equity and venture capital investment models from scratch
Have solid pe/vc acumen
Pass private equity interviews
Pass venture capital interviews

Understand how valuation impacts ownership
Calculate potential payout after multiple investment rounds
Learn about different types of investment structures
Learn how to structure and modify a cap table
Learn how to calculate proceeds from the sale of a business.
Show more
Show less

Build a cap table and waterfall analysis from scratch
Learn the actual numbers behind investment terms
Know the direct impact on ownership percentages of every major term sheet provision
Build private equity and venture capital investment models from scratch
Have solid pe/vc acumen
Pass private equity interviews
Pass venture capital interviews
Understand how valuation impacts ownership
Calculate potential payout after multiple investment rounds
Learn about different types of investment structures
Learn how to structure and modify a cap table
Learn how to calculate proceeds from the sale of a business.
Show more
Show less

Syllabus

You will be able to build your own cap table as well as model out many potential scenarios.

This is the first video in the series and where we begin to make the cap (aka capitalization) table. A cap table is where companies keep track of their ownership and who owns what. Setting up a cap table properly allows the finance team to forecast how much dilution the current owners will take when future capital is raised. The template I set up in this course is a commonly used way to build a cap table and essential if you are a startup founder, investor PE/VC analyst or just interested in finance.

In this video we begin to format the cap table properly and I show you how I generally format the excel file so that is easy to follow and expand upon. I show you how I label each column and general terminology associated with cap tables and round modelling.

We are going to add the option pool into the cap table in this video. This is often done incorrectly and in doing so can make the share price incorrect or just break the model. Fully diluted ownership is what comes into play here when adding the option pool shares into the mix.

This video is just a quick run through of the formulas and formatting created in the previous three videos to make sure everything is working correctly.

In this video we will calculate the proceeds for each of the classes of shares (series A, series B, common...etc) that were issued and are on the cap table.

Traffic lights

Read about what's good

what should give you pause

and possible dealbreakers

Teaches how to build private equity and venture capital investment models from scratch, which is essential for passing interviews and excelling in these fields

Explores cap table construction and waterfall analysis, which are critical for understanding ownership and dilution in early-stage companies

Covers liquidation preferences and their impact on overall returns, which is crucial for investors to understand the economics of a deal

Requires a base knowledge of Excel, which may frustrate learners who are completely new to spreadsheet software and financial modeling

Explores anti-dilution provisions and their impact on ownership, which is a complex topic that requires careful consideration and modeling

Focuses on modeling investment rounds using Excel, which may require learners to have access to this software to fully participate in the hands-on exercises

Reviews summary

Practical vc modeling in excel

According to learners, this course offers a highly practical and hands-on approach to understanding venture capital investment rounds through Excel modeling. Students appreciate the step-by-step guidance on building cap tables, conducting waterfall analyses, and modeling anti-dilution provisions. The focus on real-world application and the ability to build models from scratch are frequently highlighted as major strengths. Some reviewers note the course's reliance on Excel requires a basic familiarity with the software, and a few mention the pace can be fast at times. Overall, the course is seen as extremely valuable for anyone needing to deeply understand the mechanics of VC deals and equity structures.

Some found the pace challenging at times.

"Sometimes the instructor moves quite quickly through the Excel steps, requiring frequent pausing."

"Keeping up with the modeling can be challenging due to the pace."

"I needed to rewatch some sections to fully grasp the formulas being built."

"The speed is fine if you are already comfortable with Excel, but might be fast for others."

Basic Excel skills are a prerequisite.

"While not an Excel course, a basic comfort level with Excel functions and formulas is necessary."

"If you're not comfortable with Excel, you might struggle to keep up with the modeling sections."

"Having prior experience with Excel made following along with the modeling much easier."

"The course assumes you can navigate and perform basic functions in Excel."

Instructor is knowledgeable and experienced.

"The instructor clearly has deep real-world experience in venture capital."

"His explanations are informed by practical knowledge, not just theory."

"I felt confident learning from someone who has actually worked in this field."

Comprehensive coverage of key VC financial topics.

"The course does an excellent job covering cap tables, waterfall analysis, and anti-dilution in detail."

"It dives deep into the mechanics of different investment structures and term sheet provisions."

"I now have a much better grasp of how convertible notes and subsequent rounds impact ownership and liquidation."

"The explanations of liquidation preferences and waterfall calculations were particularly clear and valuable."

Directly applicable to VC/PE/startup finance.

"The skills learned are directly applicable to my work in venture capital."

"This is essential knowledge for anyone involved in startups or venture finance - founders, investors, analysts."

"The models built are exactly the kind used in the industry."

"It provided practical insights I could immediately use when looking at term sheets and cap tables."

Practical, step-by-step guidance in Excel.

"The hands-on approach building the Excel models from scratch was incredibly helpful."

"I appreciated the step-by-step process shown directly in Excel for creating the cap table and waterfall analysis."

"Learning by doing in Excel really solidified my understanding of these complex concepts."

"The course is structured around building the models alongside the instructor, which is very effective."

Activities

Be better prepared before your course. Deepen your understanding during and after it. Supplement your coursework and achieve mastery of the topics covered in Ultimate Venture Capital: How to model investment rounds with these activities:

Review Basic Accounting Principles

Show steps

Solidify your understanding of fundamental accounting concepts to better grasp the financial implications of venture capital investments and cap table modeling.

Browse courses on Financial Accounting

Show steps

Review key accounting terms and definitions.
Practice creating basic financial statements.

Read 'Venture Deals: Be Smarter Than Your Lawyer and Venture Capitalist'

Show steps

Gain a deeper understanding of venture capital deal terms and negotiation strategies to complement the course's focus on cap table modeling.

View Startup Boards: A Field Guide to Building and... on Amazon

Show steps

Read the book, focusing on key deal terms.
Take notes on important concepts and strategies.

Model Convertible Note Scenarios

Show steps

Reinforce your understanding of convertible notes by practicing modeling different conversion scenarios and valuation caps.

Show steps

Create several cap table models with varying convertible note terms.
Calculate the impact of different conversion methods on ownership.
Analyze the effects of valuation caps on conversion.

Four other activities

Expand to see all activities and additional details

Show all seven activities

Build a Cap Table Template

Show steps

Solidify your understanding of cap table construction by building your own customizable template in Excel.

Show steps

Design the layout of the cap table template.
Implement formulas for calculating ownership percentages and dilution.
Incorporate features for modeling different investment rounds.
Test the template with sample data.

Read 'Mastering Private Equity: Transformation via Venture Capital, Minority Investments and Buyouts'

Show steps

Gain a deeper understanding of venture capital deal terms and negotiation strategies to complement the course's focus on cap table modeling.

View Mastering Private Equity: Transformation via... on Amazon

Show steps

Read the book, focusing on key deal terms.
Take notes on important concepts and strategies.

Analyze a Real-World Cap Table

Show steps

Apply your knowledge by analyzing the cap table of a real-world startup and modeling potential investment scenarios.

Show steps

Find a publicly available cap table or create a hypothetical one.
Analyze the current ownership structure and identify key stakeholders.
Model the impact of different investment rounds on ownership and dilution.
Present your findings and recommendations.

Write a Blog Post on Liquidation Preferences

Show steps

Deepen your understanding of liquidation preferences by explaining the concept in a clear and concise blog post.

Show steps

Research different types of liquidation preferences.
Write a blog post explaining the concept and its implications.
Include examples and illustrations to clarify the explanation.
Publish the blog post on a relevant platform.

Career center

Learners who complete Ultimate Venture Capital: How to model investment rounds will develop knowledge and skills that may be useful to these careers:

Venture Capital Analyst

A Venture Capital Analyst plays a vital role in evaluating potential investment opportunities. The work involves conducting due diligence, creating financial models, and assessing risks associated with startups. This course helps prospective analysts understand the intricacies of capitalization tables and waterfall analysis, essential for determining ownership percentages and potential payouts after multiple investment rounds. Learning how to build these models from scratch, as taught in the course, is especially useful for this role. The course's instruction on modeling various investment scenarios also helps analysts assess the financial viability of different investment options.

See salaries and explore the career path for Venture Capital Analyst

Private Equity Analyst

The work of a Private Equity Analyst is similar to that of a Venture Capital Analyst, but focuses on investments in more mature companies. The analyst is responsible for financial modeling, market research, and due diligence. This course provides a solid foundation in building private equity investment models from scratch. In particular, the insights into structuring and modifying capitalization tables is useful to private equity analysts. Additionally, instruction on calculating proceeds from the sale of a business, as taught in the course's waterfall analysis section, is useful for assessing potential returns on investment.

See salaries and explore the career path for Private Equity Analyst

Startup Founder

A Startup Founder benefits immensely from a deep understanding of capitalization tables and investment structures. The work includes not only creating a business, but attracting investors. This course directly addresses the needs of founders by teaching them how to model out future funding rounds and understand the economic terms of term sheets. The course's hands-on approach to building a cap table from scratch helps founders accurately forecast dilution and manage their company's ownership, which is critical for maintaining motivation and maximizing returns. Modeling various scenarios is crucial for navigating the complexities of venture capital.

See salaries and explore the career path for Startup Founder

Financial Modeler

A Financial Modeler is responsible for creating and maintaining complex financial models used for forecasting, valuation, and investment analysis. This course may be useful for aspiring financial modelers as it provides hands-on experience in building capitalization tables and waterfall analyses in excel. The course's focus on step-by-step instruction and commentary on the specifics of investment structures allows modelers to develop a deeper understanding of the mechanics behind venture capital deals. Instruction on calculating potential payouts after multiple investment rounds is also useful for financial modelers.

See salaries and explore the career path for Financial Modeler

Investment Banker

Investment Bankers advise companies on raising capital through the issuance of debt or equity. The work involves financial modeling, valuation, and deal structuring. Although not the sole skillset, this course provides a solid understanding of capitalization tables and the impact of various investment terms on ownership percentages. This may be especially useful for investment bankers working with early-stage companies. The course's instruction on modeling liquidation scenarios and understanding liquidation preferences can help investment bankers advise their clients on the potential outcomes of different deal structures.

See salaries and explore the career path for Investment Banker

Venture Capital Associate

The work of a venture capital associate is to support partners in evaluating investment opportunities, conducting due diligence, and managing existing portfolio companies. This course provides practical skills in building cap tables and understanding the implications of various investment terms, making it highly relevant for associates. Learning how to calculate potential payouts after multiple investment rounds, as taught in the course, is essential for this role. For venture capital associates, the course helps in understanding the financial underpinnings of venture capital deals.

See salaries and explore the career path for Venture Capital Associate

Portfolio Manager

Portfolio Managers oversee a collection of investments, aiming to maximize returns while managing risk. This course may be useful as it provides insights into the financial structures of venture capital deals. Understanding how valuation impacts ownership and how to calculate proceeds from the sale of a business, as taught in the course, is especially useful for assessing the potential performance of venture-backed companies within a portfolio. The course's focus on modeling various investment scenarios can also help portfolio managers make informed decisions about asset allocation and risk management.

See salaries and explore the career path for Portfolio Manager

Business Development Manager

Business Development Managers focus on identifying and pursuing new business opportunities, which can include partnerships, mergers, and acquisitions. This course may be useful as it provides a working familiarity with the financial aspects of venture capital deals. The course can help business development managers better understand the financial implications of potential partnerships or acquisitions involving venture-backed companies. The instruction on how to calculate potential payouts can help these managers to assess the financial viability of different business development opportunities.

See salaries and explore the career path for Business Development Manager

Equity Research Analyst

Equity Research Analysts analyze publicly traded companies and provide investment recommendations to clients. This course may be useful as it provides a foundational understanding of the capitalization structures of companies. Although the course focuses on venture capital deals, the principles of cap table construction and waterfall analysis can be applied to understanding the equity structures of public companies. In particular, the instruction on how valuation impacts ownership can help equity research analysts assess the attractiveness of different investment opportunities.

See salaries and explore the career path for Equity Research Analyst

Corporate Development Manager

The Corporate Development Manager focuses on strategic initiatives such as mergers, acquisitions, and investments to drive company growth. This course may be useful as it provides an understanding of the financial modeling and valuation techniques used in venture capital. The focus on building cap tables and modeling liquidation scenarios can help corporate development managers assess the financial implications of potential acquisitions or investments. The course's instruction on understanding the impact of investment terms on ownership percentages can also help these managers negotiate favorable deal terms.

See salaries and explore the career path for Corporate Development Manager

Management Consultant

Management Consultants advise organizations on how to improve their performance and efficiency. This course may be useful as it provides insights into the financial structures and investment strategies used in venture capital. Learning how to build cap tables and model various investment scenarios, as taught in the course, can help management consultants advising early-stage companies. The course's instruction on understanding the direct impact on ownership percentages can also help management consultants provide strategic advice to their clients.

See salaries and explore the career path for Management Consultant

Product Manager

Product Managers are responsible for the strategy, roadmap, and feature definition of a product or product line. This course may be useful as it provides insights into the financial aspects of venture-backed companies. Understanding how valuation impacts ownership and how to calculate proceeds from the sale of a business, as taught in the course, can help product managers make informed decisions about product development and resource allocation. The course's focus on modeling various investment scenarios can also help product managers understand the potential impact of different product strategies on the company's overall financial performance.

See salaries and explore the career path for Product Manager

Business Analyst

The Business Analyst identifies business needs and determines solutions to business problems. This course may be useful for business analysts who work with startups or companies seeking venture capital funding. The course's hands-on approach can help business analysts understand the economic terms of term sheets and the implications of different investment structures. The instruction on how to project and manage growth, as emphasized in the course description, may be useful for understanding the financial underpinnings of venture capital deals.

See salaries and explore the career path for Business Analyst

Real Estate Analyst

Real Estate Analysts evaluate property investments and provide financial analysis to support real estate decisions. This course may be useful because some of the principles of financial modeling and investment analysis taught in the course can be applied to real estate transactions. Real estate analysts can use the skills of building a cap table as a base for understanding the financial structures of real estate deals. The instruction on calculating proceeds from a sale and understanding liquidation preferences may also be useful in analyzing potential real estate investments.

See salaries and explore the career path for Real Estate Analyst

Actuary

Actuaries analyze risk and use mathematical models to forecast future events, primarily for insurance and finance companies. Since this course focuses on topics such as financial modeling, and creating analyses and projections for finance, this course may be helpful in an actuary's professional development, particularly if they work at an investment organization. The course's instruction on topics of finance, such as building a cap table and waterfall analysis, may be useful for actuaries.

See salaries and explore the career path for Actuary

Reading list

We've selected two books that we think will supplement your learning. Use these to develop background knowledge, enrich your coursework, and gain a deeper understanding of the topics covered in Ultimate Venture Capital: How to model investment rounds.

Startup Boards

Save

Provides a comprehensive overview of venture capital deal terms, negotiation strategies, and the legal aspects of venture financing. It's a practical guide for both founders and investors, offering insights into term sheets, valuation, and due diligence. It serves as an excellent companion to the course, providing context and deeper understanding of the concepts covered. This book is commonly used by both entrepreneurs and venture capitalists.

Startup Boards: A Field Guide to Building and...

Hardcover

Startup Boards: A Field Guide to Building and...

Kindle Edition

Mastering Private Equity

Save

Provides a comprehensive overview of private equity, including venture capital. It is highly relevant to the course as it covers topics such as investment strategies, valuation, and deal structuring in detail. Reading this book will give you a deeper understanding of the financial aspects of venture capital deals, complementing the course's focus on cap table modeling. It is commonly used as a reference by both founders and investors.

Mastering Private Equity: Transformation via...

Hardcover

$$$

Ultimate Venture Capital

How to model investment rounds

What's inside

Learning objectives

Syllabus

Traffic lights

Save this course

Reviews summary

Practical vc modeling in excel

Activities

Career center

Reading list

Share

Similar courses