Fund Economics

Applying the Pareto Law for forecasting

Asked by:
Community Member
Nov 21, 2023
So with an understanding of the power law in its concept, does anyone know of an excel formula or model for figuring out what level of growth is needed by the 20% to break-even?

the numbers to consider:
I have written 50 checks for $100,000
Suppose 40 of them collapse to 0
suppose 8 of them have a 5x exit for me

What would the other 2 need to reach as exit value to maintain breakeven, and then growth?

What should i be considering in my model for this question?

Is this something that can be easily modeled in excel? Has someone put something like this together?
1 answer
Accepted Answer
Nov 22, 2023
Your model largely depends on your strategy. It's sub-optimal to create a strategy based on a model. Instead, a model needs to based on the strategy. You can find a good model template here: https://foresight.is

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