At Saison Capital, we are always looking to build tools to automate our backend tasks to allow us to focus on the things that make us better VCs — thinking and helping founders. As we are currently expanding our LP investment portfolio, especially in the US, one common calculation we do is figure out the net returns from Special Purpose Vehicles (SPVs) that GPs might have done or to calculate returns for first time angels-turning-VC fund managers, who typically have a number of SPVs as part of their historic returns profile.
We decided to publish this calculator as we realized it could be helpful for other funds, angel investors, high net-worth individuals and family offices in the ecosystem that want to get more insight into fund returns. This may also be helpful for those who are looking at investments on the GP rather than the LP level.
Of course, calculating the internal rate of return (IRR) is fairly easy using Excel/Google Sheets’ built in (X)IRR functions. But trying to figure out the net IRR after taking into account all the associated fees is not as straightforward.
Since we couldn’t find an existing calculator that takes these fees into account, we built one for our most commonly modeled scenario: a lump sum investment and single withdrawal with a management fee, carry and one time setup costs. Given this information, we can calculate the gross returns, the returns net of fees, the GP’s and the LP’s return multiple, total cash returned in hand and the various fees generated.
Today, we are releasing our calculator as a Google Sheets file that can be freely downloaded and modified. We’ve also added some features like sensitivity tables that allow one to see the effect of fees and valuations on the net IRR of an investment.
We hope this calculator will be useful not just for other VCs and their LPs but also for investors in any other kind of funds that have similar fee structures. Feel free to contact me at email@example.com for any questions, bug reports 🤞 or feature requests!