Scott Lenet – A model portfolio can be one of the most important tools in venture capital. To the extent that investors have a financial plan for how to deploy and then harvest capital, it’s contained in this relatively simple spreadsheet that shows an estimated annual set of cash outflows and inflows — not just for individual deals, but for an entire portfolio of investments.
Like any other financial plan, a model portfolio is an inexact projection. The model will be wrong and requires frequent updates. But it’s important to start with a plan; this can help keep the entire effort on track with your budget and avoid the unpleasant experience of running out of cash unexpectedly.
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