Financing Scenarios

What this model answers

Operating Plan & Runway establishes how much capital the company needs and when. Financing Scenarios asks how that capital could be structured. It sits between the operating forecast and Cap Table because a financing decision changes both cash obligations and investor economics.

• Should the required capital be priced equity, a post-money SAFE, debt or a supported mix?
• How does the same headline financing amount change runway once fees and repayments are included?
• How much dilution does priced equity create, and what ownership remains unresolved under a SAFE?
• Does a structure maintain the cash buffer in Base, Bear and Bull operating cases?

Freeze the operating baseline

Import a saved Operating Plan and choose the Base, Bear and Bull cases to retain. Review the source name, revision, planning period and financing events, then use the reviewed cash snapshot. The comparison keeps that snapshot even if the source later changes. Checking the source and reviewing a refreshed snapshot are explicit actions.

Included source financing

Checked equity events and debt facilities remain commitments in the baseline. The no-additional-financing reference therefore means existing commitments only, not necessarily zero financing.

Excluded source financing

Uncheck a proposed raise when the alternatives will replace it. Excluding a new loan removes its draw, fees and repayment schedule together. Opening debt stays included. Other cash events also remain included.

Manual cash baseline

Alternatively, enter a monthly cash path with opening cash, a target buffer, operating and other movements, and committed financing. This supports comparison without inventing detailed operating drivers.

Establish opening capitalization

For a simple company, use manual capitalization: name each holder, enter their common shares, set the opening date and add any unallocated common option reserve. For an existing company, import a saved Cap Table. Its reviewed history retains holders, security classes, transactions and pending instruments; an optional date cutoff defines the opening point.

Shares establish the pricing and ownership denominators. Holder identities distinguish a follow-on investment by an existing holder from a new investor. Preferred rights, option reserves and outstanding converters can change the result, so a percentage alone is not a sufficient opening record. New financing must follow the retained history. Historical cash receipts from Cap Table are not imported into the cash baseline.

You can also choose cash comparison only. Without opening capitalization, cash results remain useful, but the model cannot establish dilution. Missing capitalization, unsupported terms and ownership pending conversion are separate conditions.

Choose financing alternatives

Priced equity

Enter gross investment, pre-money valuation (the company value before new investment) and an exact closing date. Allocate the full investment among named investors. Company issuance costs reduce cash received without reducing subscribed investment or share issuance. Opening capitalization and the round terms determine the new shares and dilution.

Preferred class terms

Name the new class and specify its liquidation preference multiple, seniority, participation and voluntary conversion right. Lower seniority numbers receive preference first; equal tiers rank together. Participation can be none, uncapped or capped. These rights carry into Cap Table for exit analysis.

Existing converters and protections

A priced round can convert supported instruments already in the opening context and can include a common reserve top-up. Conversion adds shares without new cash. Existing anti-dilution protections require explicit bases; unsupported combinations are rejected.

Post-money SAFE

A SAFE is a Simple Agreement for Future Equity. Enter purchase amount, valuation cap, issue date, investor and any company issuance cost. The cap is a conversion-pricing term, not a current company valuation. This is the valuation-cap convention without a discount. It funds cash on issuance and creates a pending contractual instrument; it does not issue common shares or resolve future conversion.

Fixed-rate debt

Enter principal, draw month, nominal annual interest rate, maturity, interest-only months, amortization months and upfront/final cash fees. During interest-only months, payments cover interest without reducing principal. Amortization spreads principal repayment over time; a longer amortization period can leave a balloon due at maturity. The draw brings cash in; interest, principal and fees take it out.

Blended financing

Combine priced equity with debt, or a post-money SAFE with debt. Each alternative supports one primary equity/SAFE instrument and one new fixed-rate facility. This exposes dilution or pending ownership alongside the repayment burden.

Run and read your first comparison

1. Review the starting case

   In Cash baseline, review the imported cases and included commitments. In Capitalization, review the opening shares and rights or choose cash comparison only.

2. Add the structures to compare

   Name each alternative, enter its amounts and timing, and select the operating cases it should cover. Keep amounts comparable when isolating instrument choice. You can create up to six alternatives alongside the mandatory reference.

3. Run comparison and inspect the path

   Check minimum cash and the first cash or buffer breach before relying on horizon-end cash. The chart and monthly ledger show whether financing arrives too late. A later raise does not remove an earlier shortfall.

4. Read obligations and ownership together

   Review debt at the horizon, full-term interest and fees, the funding/debt schedules and the selected holder’s fully diluted ownership. After changing assumptions, run comparison again before exporting current results or applying a proposal.

Gross new financing excludes baseline commitments. Net company cash received deducts issuance and upfront fees; later repayments still reduce cash. Debt interest and financing fees in the comparison cover the full new facility term, including obligations beyond the cash horizon. Dilution is shown in percentage points. CSV exports cover comparison, monthly cash, funding, debt and ownership.

Worked comparison: a $155,000 capital requirement

In the illustrative pre-seed case, Operating Plan identified an approximate $155,000 total capital requirement. The initial $100,000 financing assumption is excluded from the comparison baseline so each alternative replaces it. Founder A begins with 70% of 10,000,000 opening common shares; priced equity uses a $2,000,000 pre-money valuation.

The equity and SAFE examples bring in the same cash, but establish different ownership positions. This example assumes no reserve changes or conversions; debt issues no shares here, so Founder A remains at 70%. Repayments reduce cash and principal remains outstanding. The blend reduces equity dilution relative to the full equity raise, with debt service still affecting liquidity.

Review and apply a proposal

In Apply proposal, choose the alternative, operating case and destination workbench. Preview the proposed changes, inspect the destination and confirm only after review. Operating Plan and Cap Table remain separate workbenches. Running comparisons or importing snapshots never silently updates either source.

• Operating Plan: select a compatible saved plan. Review whether the proposal replaces excluded financing or adds to retained commitments. Accepted financing is shared across its operating cases. A manual cash baseline cannot be transformed into revenue, hiring or expense drivers.
• Cap Table: create a separate model from the reviewed frozen capitalization, or select a compatible saved destination. Preview the proposed holders, classes, transactions and capitalization. A SAFE remains pending; debt creates no security rights, so a debt-only alternative has no Cap Table issuance to apply.

Read the model boundaries

The cash horizon is monthly, up to 60 months. Debt draws at the beginning of its month, with first service at month-end; nominal annual interest is divided by 12. Month-end cash cannot establish intramonth solvency. Full contractual debt obligations remain visible beyond the horizon.

V1 does not model revolving facilities, debt warrants or automatic refinancing. It does not calculate an exit waterfall, predict financing availability, weight scenarios by probability or optimize the capital structure. Currency is a denomination, not an exchange-rate conversion. Entered economics do not determine legal, tax or accounting treatment.

Follow ownership through to exit

Once you have reviewed the financing structure, continue into Cap Table & Liquidation Waterfall. Inspect the resulting share counts, preferred rights and holder distributions across exit assumptions. The capital requirement has become a financing proposal; the next question is what that proposal means for each holder.

• Read the Cap Table & Liquidation Waterfall guide →
• Model the ownership outcome →