Financing Round Simulation
Simulation overview
The Simulation tool will help you develop an understanding of what will happen with the equity and ownership in your company in the event of a financing round.
The Nimity simulation tool, will help you answer questions such as:
What’s the ownership percentage a certain shareholder will be left with after a new investment of 500.000 EUR?
What will the post-money valuation be after a new 2.000.000 EUR investment
How many fully-diluted shares will there be after a new funding round?
How many shares will a convertible owner receive if s/he chooses to convert their convertible?
What’s the value of shareholder’s X equity at a new share price?
And much, much more.
Adding a new simulation
To get started simply click on “Add new simulation” and the simulation screen will become available. Depending on your plan you might only be limited to 1 active simulation per company, but users subscribed to one of our paid plans can create as many simulations as they want.
How it works?
A simulation always starts from a certain snapshot of your cap table. Currently on Nimity, the only available starting point is your current cap table as it is setup at the moment of creating a simulation. Soon, a simulation will be able to start from another simulation such that you can build more complex simulations.
A simulation is made of 4 parts:
Financing round details
Here you can fill in the following information:
Round name: The name of the financing round you are simulating for better organization (e.g Seed, Series A, Series B, etc)
Pre-money valuation: The pre-money valuation is automatically calculated based on the “Pre-money share price”. Pre-money valuation = fully diluted number of shares * pre-money share price.
Pre-money share price: the share price at which the round happens. Nimity automatically brings in the latest share price from a valuation event. You can overwrite this number as you please. The share price will be used in automatically calculating new equity issued to new or old investors, as well as calculating the conversion of existing or newly added convertibles.
Round closing date: a future date that will be used to calculate any possible existing interests on convertibles.
Adding new investments
Adding new investments made in the round you are modeling can be done in 2 ways:
Easy mode - where you can just add the total invested amount overall. Doing so will automatically update your post-money valuation using the following formula: Post Money valuation = Pre money valuation + invested amount
Doing so, in the results section you will see a new line in the table displayed as “Round name” and the number of shares the investors in that round will get (both as a number and as a percentage)
Advanced more - here you can add each investor (new or already existing), together with the amount invested. Doing so, the new ownership of that person will automatically be updated. In case an already existing stakeholder is selected together with a new invested amount, the ownership displayed will also take into account the already existing number of shares that stakeholder held.
Doing so, in the results section you will see a line for each investor you have added in the advanced mode, together with the number of shares they hold and the ownership percentage
Employee Stock Option Pools
The following section in the simulation tool represents the Option Pools and basically asks the user of the simulation tool whether they want to take into account option pools when showing the results of the simulation.
If you already have created option pools on your cap table, the option pools will show up in the simulation tool along with the number of shares held by each pool, together with the total amount of shares held by all pools and the ownership percentage those pools represent in your cap table.
If you want to simulate the financing round without taking into account the option pools, then you can simply toggle off the option pools. Doing so will also impact the number of fully diluted shares by subtracting the total amount of shares held in option pools from the fully diluted number of shares, thus impacting the pre-money valuation (since Pre-money valuation = fully diluted number of shares * pre-money share price; where fully diluted number of shares = already issued shares + option pools)
You can still simulate option pools even if you had not added them before in your cap table before jumping on the simulation. To do so, you can simply add a new pool, together with the amount of shares held by that pool. The new pools you will add won’t affect the pre-money valuation, as they would be created after the financing round, but will affect the post-money share price, since post-money share price = Post money valuation / fully-diluted number of shares. And the new option pools created represent part of the fully diluted number of shares.
Convertibles
The convertible section helps users have a better understanding of how the different convertibles will convert into equity showing the number of shares each convertible owner will receive if choosing to convert either their SAFEs or Convertible Notes. If at the moment of creating a simulation, there are already Convertibles present on your cap table, then the Convertibles will automatically be turned on (toggle on) and the following tables will show you how these would convert. The convertible section will automatically calculate what’s the best conversion for the convertible owner. Whether converting on the discounted share price or whether converting on the max valuation.
If you want for your model to not take into account convertibles, then you can simply toggle off the convertible section. If you want your model to take into account new convertibles, you can simply toggle on the convertible section of interest and add the details of which type of convertible you want to model.
Results
The final section of the simulation tool shows you the result of all the variables you had entered in the previous sections. This is where you can see the impact of the new investments added on your ownership.
For ease of use, the results section is currently split into 3 views;
Post financing round overview: Here you see at a glance the following information:
Post money valuation: Post money valuation = Pre-money valuation + New money
Total new money: the total invested amount in the round
New price per share: New price per share = Post money valuation / Fully diluted number of shares
Fully diluted number of shares: updated number of fully diluted number of shares (issued shares + shares in option pools)
Option pools ownership: the ownership represented by Option Pools
Ownership change overview
Provides a table showing you the state of your cap table before the financing round and after the financing round, showing you for each of the investors the change in ownership after the new financing round
Spotlight Stakeholder
Allows you to highlight a certain stakeholder to better view their ownership and equity value before the round and after the round.
Once you are done modeling your simulation, you can save it and then it will be available for other collaborators to view.
You can also create as many simulations as you want (provided you are one of our paid plans).
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