This model track investments, share units of securities, conversions, exercises, and preference rights through multiple rounds of financing of a company.

The model includes five types of securities.

• Common shares
• Convertible notes earn non-cash payments (called dividends in the model), have the most senior payment preference rights in liquidation, and can convert to common stock.
• Preferred stock earns non-cash payments (called dividends), have payment preference rights in liquidation, and can convert to common stock.
• Options have an exercise price to convert to common stock, a selling price, and limitless term.
• Warrants are options that are issued and guaranteed by the company.

You can set the number of series for each types of security. Each series of each type of security has its own prices and terms. Common share are all equivalent and have one series.

You can choose the number of investment rounds, their dates and names. Each investment round has five phases.

1. "Start Phase": Stock splits occur and dividends in kind are paid at the start of each investment round. The value of the company at this point is used in determining prices of securities during the round.
2. "New Sales Phase": Sell new securities (convertible notes, preferred stock, warrants, options, common stock)
3. "Post Sales Phase": Record investments and share units after sale of new securities.
4. "Conversion Phase": Stakeholders can convert notes and preferred shares and can exercise warrants and options to obtain common stock.
5. "End Phase": Record security holdings, prices and values at the end of the investment round.

All five phases are assumed to occur on the date of the investment round. You cannot change the number of phases within a round, or which types of transaction occur in each phase of an investment round. (These changes can be made in the ModelSheet Authoring environment, but not in the model customizer.)

The model reports the following outputs.

• the number of share units of each series of each type of security purchased in each investment round
• the value and share units of each series of each type of security owned before and after each investment round
• the number of fully diluted common share units before and after each conversion event
• the valuation of the enterprise before and after each investment round
• the payout at liquidation to the original holders of each series of each type of security, after adjusting for any conversions of convertible notes and preferred shares, and exercises of warrants and options
• the payout at liquidation to each series of each type of security, accounting for liquidation preferences of senior securities. Tracking of liquidation preferences and valuation scenarios (see below) enable the model to accurately analyze a wide range of outcomes, from stellar success to bankruptcy liquidation.

You can specify how many valuation scenarios and how many investment scenarios you want.

• For each valuation scenario, you specify a valuation of the company at the beginning of each investment round.
• For each investment scenario, you specify different amounts of investment in the company in each round, segmented by rounds and types of securities.

The key results are collected on worksheets "Investment", "Shares," "Valuation", and "Payout."