A few outcomes can carry a portfolio.
A portfolio outcome model makes the distribution behind an average multiple visible. Losses, moderate outcomes and exceptional winners contribute very differently to aggregate proceeds. Equal checks simplify the comparison but are an explicit limitation.
This three-bucket scenario is not a fitted power-law distribution or an expected-value forecast. The number of winners and their multiples are assumptions. Gross proceeds divided by commitments is a fund-size contribution measure, not net LP TVPI.
The formula, made clear.
- Total capital per company
- Equal cumulative investment, including any follow-on capital.
- Fund contribution
- Gross proceeds divided by fund commitments, before fees and carry.
- Winner concentration
- Share of gross proceeds generated by the winner bucket.
Put the numbers in context.
Ten write-offs, eight 2× outcomes and two 20× outcomes on $1,000,000.00 each return $56,000,000.00 on $20,000,000.00 invested: 2.8× gross MOIC. Winners provide about 71.43% of proceeds.
| Input | Example value |
|---|---|
| Written-off investments | 10 companies |
| Base-outcome investments | 8 companies |
| Winner investments | 2 companies |
| Equal total invested capital per company | $1,000,000.00 |
| Base-outcome gross MOIC | 2 × |
| Winner gross MOIC | 20 × |
| Fund commitment denominator | $25,000,000.00 |
| Portfolio gross MOIC | 2.8× |
What this calculation assumes
Three deterministic buckets, equal invested capital and no timing, fees, carry, fund expenses or recycling. Total modeled investment cannot exceed the entered fund commitment; uninvested commitments are not assumed to generate proceeds.
What to consider next.
Stress one fewer winner and lower exit multiples. Model reserves and use actual paid-in capital for LP fund metrics.
How we approach financial models →