Shane Ian Murphy on Dual Party Capital: Better Projections Begin With Visible Assumptions

I am Shane Ian Murphy, cofounder of Dual Party Capital. This is an affiliated founder’s account of how I think about the information behind structured financing and investment discussions, which form part of our stated focus alongside asset tokenisation. A projection can be beautifully presented and still be difficult to assess. The issue is often the distance between the headline result and the assumptions required to produce it. I want that distance to be easy to examine.

My first question is usually about the source of an input. Is it drawn from an operating record, a signed commercial agreement, a supplier estimate or a management expectation? Each can have a place in a model, but they carry different kinds of uncertainty. A useful presentation identifies those differences. When every input appears equally settled, the reader has to reconstruct the evidence before beginning to evaluate the proposed business case.

I also want to know how the business expects to move from activity to cash. Revenue recognition and payment timing are different questions. A growing order book may increase working capital needs before it increases available cash. Delayed receipts can matter even when demand appears strong. A model that shows the timing of collections, costs and other obligations helps participants understand the practical funding requirement, rather than relying exclusively on an annual profit figure.

Costs deserve the same scrutiny as revenue. Some costs rise with activity, some arrive in steps and some continue regardless of sales. A forecast can become misleading if it treats all three as a smooth percentage. I would ask which assumptions reflect an actual operating constraint. Will additional capacity require another team, a new facility or a larger minimum supplier commitment? Those details explain why growth can change the shape of a business as well as its size.

A sensible model should make uncertainty visible through scenarios. I prefer a small number of clearly explained variations to a large collection of unexplained outputs. A later start, slower collections or a different cost level can each reveal something about the proposed plan. The purpose is to understand sensitivity: which assumptions have the greatest effect, and how much room the business has to respond before a problem becomes difficult to manage.

Dependencies are particularly useful to identify. A projection may assume that a product launches before a sales campaign begins or that a contract is signed before recruitment expands. If the first event moves, the subsequent assumptions may need changing too. I do not want a model to preserve its original result simply because linked inputs were left untouched. A credible explanation shows how the moving parts relate and what management would reconsider if a dependency changed.

I think the presentation should also separate a target from an expectation. A team may set an ambitious commercial goal while using a more cautious planning assumption for cash commitments. Both can be useful if they are labelled honestly. Confusing them makes it harder to understand how decisions are being made. The reader needs to know whether a figure represents an aspiration, a central planning case or an obligation that already exists.

Version control sounds administrative, but it supports the substance. When assumptions change during a discussion, participants should be able to see what changed and why. A revised forecast should have a date, a clear owner and a short explanation of the material differences. Without that discipline, two parties may discuss different versions while believing they are assessing the same proposal. A simple record can prevent considerable wasted effort.

At Dual Party Capital, I want the quality of a discussion to depend on the clarity of the underlying explanation. A forecast is a tool for exploring a business case, and its usefulness comes from making assumptions available for challenge. I would rather discuss an uncomfortable input openly than protect an impressive result from examination. That approach gives founders and potential counterparts a better basis for deciding what information is missing and what the next commercial step should be.

Company: https://www.dualpartycapital.com/

Personal: https://shanemurphy.co.uk/