Should you model your fund forward or check the one you have

Two different instruments

A construction model projects forward. You give it assumptions, entry valuations, graduation rates, dilution, exit multiples, and it tells you what the fund produces if those assumptions hold. Change an assumption and the output moves. Tactyc is the best-known instrument of this kind, and Carta's fund forecasting does a version of the same work.

A construction check reads backwards from what has been declared. It takes no assumptions about the future at all. It asks whether the fund size, the portfolio count, the ownership target, the stage, the scope, and the reserve share describe one coherent fund or several different ones, and it answers from the configuration alone.

These are not competing answers to one question. They are answers to two questions that happen to take the same inputs.

What each is good for

A model is the right instrument when the question is conditional. What happens to this fund if graduation rates halve. How much does a slower exit environment cost. What does the return profile look like if we write twenty-five cheques instead of forty. Those questions require a projection, and a check cannot produce one.

A check is the right instrument when the question is about the configuration itself. Whether the cheque this fund can write is a cheque that buys the ownership it targets at the stage it enters. Whether the team can serve the board seats the portfolio implies. Those questions have answers that do not depend on any forecast, and running them through a model would mean introducing assumptions the question did not need.

There is a timing difference too. A model is most valuable while a fund is being designed, when assumptions are still being chosen. A check keeps working after the fund has closed, because a declared configuration is still a declared configuration in year four, and it can still be checked against what the firm has become.

Why they are complementary rather than substitutes

The clearest way to see it: a model can be internally consistent and still describe a fund that cannot be executed. Assumptions can be individually reasonable and jointly impossible, and a projection will run happily on them, because a model's job is to compute the consequence of assumptions rather than to audit them.

Equally, a check can confirm a configuration holds together and tell you nothing about whether the returns are worth having. Coherence is not ambition. A small, tidy, entirely consistent fund is exactly the sort of thing a check approves of and a model would show returning modestly.

A firm using both is asking, does this fund make sense, and separately, is this fund worth running. Most General Partners we have spoken to who use a modelling tool are not looking for a second one. They are looking for the question the model does not ask.

Where the Colibrí Architecture model sits

The model is a check, and only a check. It does not project returns, does not run scenarios over assumptions, and does not produce a fund model. Nothing in the platform replaces a construction model, and a firm that needs one should use one.

It also reads two things a construction model generally does not, because they are not fund-level questions. Firm Design Congruence reads the structural choices around the fund, including how the investment committee votes and whether the team can carry its own board commitments. Cross-Fund Concentration reads across every fund the firm runs at once. Both sit above the fund a model would be built for.

Sources

• Tactyc Content CenterTactycThe construction-modelling category this page distinguishes itself from, in its own words.
• Portfolio construction: How to develop a fund strategyCartaA representative statement of what a construction plan contains.