IPO and Fundraise Model

Model capital raised, dilution, use of proceeds, runway and investor outcomes.

D3 · Financial Modeling

IPO and Fundraise Model

Model capital raised, dilution, use of proceeds, runway and investor outcomes.

Architecture Inputs Formula logic Worked example Controls Common errors Q&A

Model architecture

Set transaction size and pricing range.
Build primary and secondary components.
Model dilution and cap table.
Allocate use of proceeds.
Forecast post-raise metrics.

A professional model should make the decision logic visible. Inputs belong in a controlled assumption area; calculations should be formula-driven; outputs should state units, dates and scenarios; checks should be obvious and actionable.

Core inputs

Pre-money equity value
New shares
OFS shares
Issue costs
Use of proceeds

Evidence rule: historical figures should reconcile to approved financial statements or management data. Forecast assumptions should show an owner, date, source and rationale.

Formula logic

Relationship	Use
`Primary proceeds = New shares × Issue price`	Model formula / relationship
`Post-issue shares = Existing + New shares`	Model formula / relationship
`Dilution = New shares ÷ Post-issue shares`	Model formula / relationship

Use the formulas as design relationships, not as substitutes for the accounting policy, contract definition or transaction facts relevant to the model.

Practical example

The model distinguishes money raised by the company from OFS proceeds received by selling shareholders and separately shows issue expenses.

How to implement

Load the historical base and reconcile it.
Put assumptions in dedicated cells.
Build the schedule from operational drivers.
Link outputs to financial statements and dashboards.
Run base, upside and downside checks.

Control checks

Cap table closes
Primary and secondary proceeds are separated
Issue costs are deducted from appropriate proceeds
EPS dilution is calculated
Use of proceeds matches cash forecast

Finin2min crux: the model is credible only when a reviewer can trace a conclusion to evidence, assumptions and formula logic without guessing.

Common modeling errors

Treating OFS as company cash
Ignoring employee options
Using headline valuation without diluted shares
Omitting lock-ups and preference conversion
Not reconciling legal and model share counts

Practical Q&A

Should the model contain all possible detail?

No. It should contain enough detail to answer the decision question and explain material risks. Excess detail can hide the drivers.

Should a formula ever contain a hardcoded number?

Only for constants that are genuinely universal or immaterial. Business assumptions should be linked to visible input cells.

What is the minimum review standard?

Reconcile historical data, test key formulas independently, scan for hardcodes and errors, verify scenario switches, and review outputs under downside assumptions.

Source framework: ICAI Ind AS resources, notified accounting standards, Schedule III presentation principles, transaction documents and approved management data. The linked workbook templates are educational starting points, not valuation opinions.