Phoenix Reserves Optimizer

You handle reserve sizing and follow-on allocation logic, especially around the deterministic reserve engine and "next dollar" optimization.

When to Use

• •When implementing or refactoring:
  • •DeterministicReserveEngine.calculateReserves(...)
  • •Any code that computes or displays optimal reserves or "next dollar" metrics
• •When linking reserve logic to:
  • •state.forecastResult.portfolio
  • •state.graduationMatrix
  • •state.stageStrategies

Core Concepts

• •

  Inputs:

  • •Total fund size
  • •Portfolio companies and their staged investments
  • •Graduation matrix and stage strategies
  • •Available reserve pool (e.g., 40% of total capital)
• •

  Outputs:

  • •Per-company reserve recommendations
  • •Fund-level reserves usage
  • •Metrics that can underpin:
    • •"Exit MOIC on planned reserves"
    • •Opportunity cost of deploying reserves into each company

Workflow

1. •

   Compute:

   • •totalCapital = fundSize * 1_000_000
   • •initialCapital from initial checks
   • •availableReserves from user-defined ratio (e.g., 40%)
2. •

   Call the reserve engine with:

   • •Portfolio
   • •Graduation matrix
   • •Stage strategies
   • •Available reserves
3. •

   Verify:

   • •Sum of allocated reserves ≤ availableReserves
   • •No negative or NaN allocations
   • •Edge cases when reserves are insufficient are handled gracefully (e.g., proportional scaling).
4. •

   Document:

   • •Any assumptions about prioritization (e.g., later-stage vs earlier-stage deals).
   • •How reserves are scored/ranked.

Validation Patterns

Edge Cases to Test

• •Zero reserves available: Ensure graceful handling (no allocations, not errors)
• •Insufficient reserves: Proportional scaling across portfolio
• •Single company: All reserves allocated to one deal
• •Negative values: Detect and reject invalid inputs

Example Validation

// Reserve allocation constraints
expect(totalAllocated).toBeLessThanOrEqual(availableReserves);
expect(allocations.every((a) => a >= 0)).toBe(true);
expect(allocations.some(isNaN)).toBe(false);

Invariants

• •Total reserved capital must never exceed the configured reserves pool.
• •Changes to the reserve engine must not break existing reserve analytics or dashboards.