ReddRadar
Agent skill
dcf-modeler
Builds DCF models with terminal value, WACC calculation, sensitivity tables
Install this agent skill to your Project
npx add-skill https://github.com/a5c-ai/babysitter/tree/main/library/specializations/domains/business/venture-capital/skills/dcf-modeler
Metadata
Additional technical details for this skill
- domain
- business
- skill id
- vc-skill-023
- specialization
- venture-capital
SKILL.md
DCF Modeler
Overview
The DCF Modeler skill builds Discounted Cash Flow valuation models for venture capital analysis. While DCF is less common for early-stage VC, it supports late-stage growth investments, exit analysis, and LP return modeling where cash flow projections are meaningful.
Capabilities
Cash Flow Projection
- Project operating cash flows
- Model capital expenditure requirements
- Estimate working capital changes
- Handle loss-making growth phase transitions
Discount Rate Calculation
- Calculate WACC for appropriate structures
- Apply venture-appropriate discount rates
- Adjust for stage and risk profile
- Model cost of equity with VC premiums
Terminal Value Estimation
- Calculate terminal value via exit multiple
- Apply perpetuity growth method
- Hybrid terminal value approaches
- Terminal value sanity checks
Sensitivity Analysis
- Build sensitivity tables
- Model key assumption impacts
- Calculate value driver sensitivities
- Create scenario matrices
Usage
Build DCF Model
Input: Financial projections, assumptions
Process: Build cash flow model, calculate value
Output: DCF valuation, model outputs
Calculate Discount Rate
Input: Company profile, capital structure
Process: Calculate appropriate discount rate
Output: WACC/discount rate, methodology notes
Estimate Terminal Value
Input: Terminal year financials, exit assumptions
Process: Calculate terminal value
Output: Terminal value, percentage of total value
Run Sensitivity Analysis
Input: Base case model, sensitivity parameters
Process: Calculate sensitivities across ranges
Output: Sensitivity tables, tornado charts
DCF Components
| Component | VC Considerations |
|---|---|
| Projection Period | 5-10 years to steady state |
| Discount Rate | 20-40%+ for early stage |
| Terminal Value | Often 60-80%+ of total value |
| Cash Flows | May be negative for years |
| Exit Multiple | Primary terminal method |
Integration Points
- DCF Analysis Process: Core modeling skill
- Financial Model Validator: Validate model inputs
- Multiple Calculator: Terminal value multiples
- Sensitivity Analyst (Agent): Support analysis
Discount Rate Considerations
| Stage | Typical Discount Rate |
|---|---|
| Seed | 40-60% |
| Series A | 35-50% |
| Series B | 30-40% |
| Growth | 20-30% |
| Late Stage | 15-25% |
Best Practices
- DCF is supplementary for early-stage VC
- Use realistic projections, not hockey sticks
- Heavily weight terminal value sensitivities
- Consider probability-weighted scenarios
- Triangulate with VC method and comparables
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