Allocations
Allocations are where you define the types of investments your fund will be making. Think of these as “investment profiles”.
Last updated
Allocations are where you define the types of investments your fund will be making. Think of these as “investment profiles”.
Last updated
The Current Allocations shows your currently defined allocations. Click on + New Allocation to create a new allocation or click on any of the allocations to edit their parameters.
In the first section for each allocation, define the following:
Allocation Name: a friendly name for this allocation for e.g. “Seed Investments”
Sector Profile: select the sector profile to be used for this allocation. Tactyc will use the round sizes and valuations from that sector profile to determine future calculations
Entry Round: select the entry round from the sector profile
Capital Allocation (%): the percentage of investable capital that will be used to make initial and follow-on investments in this allocation
Initial check size can be entered either as an Amount or as a Entry Ownership (%). For e.g. a 10% Entry Ownership means, the model will invest the amount needed to get a 10% ownership in the portfolio company
Tactyc will automatically show some helpful calculations such as:
Implied Entry Ownership (if you’re entering check size amount)
Number of initial investments expected in this allocation
Total Capital Allocated towards initial investments in this allocation
Similar to the initial check section, you may enter a follow-on check size amount for future rounds or ask Tactyc to maintain ownership (%).
Follow-on Participation (%): This is where you set how often you expect to follow-on. Setting this to 100%, means the fund will follow-on into every single graduation. Setting this to 50%, means the fund will follow-on 1 in 2 graduations.
The helper calculations show the implied follow-on check sizes, graduations, number of follow-ons and capital allocated
Finally, set your Initial Investment Horizon i.e. the time period over which you expect the fund to make initial investments in this allocation.
Let’s say your fund’s investable capital is $100mm, and you’ve defined a Seed allocation with capital allocation of 40%. This means $40mm of capital will be used to make initial Seed investments and any follow-on investments for those Seed companies.
Based on your initial check size, Tactyc estimates how many initial investments your fund can make
Based on the graduation rates from your sector profile, Tactyc estimates how many companies will end up graduating
Based on your follow-on participation %, Tactyc estimates how many companies the fund will follow-on into
This $40mm will then be further allocated towards initial and follow-on investments based on the relative proportions of initial and follow-on investments. What this means is if you lower your follow-on investments, your initial investments will increase - as there is more capital left over to make initial investments. Conversely, if you increase follow-ons, your initial investments will decrease.
To summarize, Tactyc will always end up fully deploying the entire $40mm of capital - the relative shifts between initial and follow-ons is determined by the check sizes in each category.
