1. Square, Inc. raised its first round of venture capital by issuing 10 million shares of...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
1. Square, Inc. raised its first round of venture capital by issuing 10 million shares of Series A preferred stock for $1 per share, which is convertible into common stock on a 1-1 basis and has a non-participating 1x non-participating liquidation preference. Before the Series A offering, there were 30 million shares of common stock outstanding. One year later, Square needs to raise more capital, so they now plan to issue 5 million shares of Series B preferred stock, which is convertible into common 1-1 and has a non-participating 1x non-participating liquidation preference and a weighted-average ratchet. After meeting with several VC firms in the Valley, they agree on a price of $10 per share. They now have 35 million shares of common stock. [A] Complete the Series B cap table below by filling in the shaded area: Common Series B Round Shares Issued (millions) Price After Conversion Percentage of Common Series A convertible preferred Series B convertible preferred Common shares Total shares [B] Determine the pre- and post-money valuation for Series B round. [C] Based on the information above, explain whether Square could currently be considered a "Unicorn"? [D] If Square is acquired 1-year later for $200 million, what is the value of each shareholder's (A, B, and 1. Square, Inc. raised its first round of venture capital by issuing 10 million shares of Series A preferred stock for $1 per share, which is convertible into common stock on a 1-1 basis and has a non-participating 1x non-participating liquidation preference. Before the Series A offering, there were 30 million shares of common stock outstanding. One year later, Square needs to raise more capital, so they now plan to issue 5 million shares of Series B preferred stock, which is convertible into common 1-1 and has a non-participating 1x non-participating liquidation preference and a weighted-average ratchet. After meeting with several VC firms in the Valley, they agree on a price of $10 per share. They now have 35 million shares of common stock. [A] Complete the Series B cap table below by filling in the shaded area: Common Series B Round Shares Issued (millions) Price After Conversion Percentage of Common Series A convertible preferred Series B convertible preferred Common shares Total shares [B] Determine the pre- and post-money valuation for Series B round. [C] Based on the information above, explain whether Square could currently be considered a "Unicorn"? [D] If Square is acquired 1-year later for $200 million, what is the value of each shareholder's (A, B, and
Expert Answer:
Related Book For
Intermediate Accounting Volume 2
ISBN: 9781119497042
12th Canadian Edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Irene M. Wiecek, Bruce J. McConomy
Posted Date:
Students also viewed these finance questions
-
Find the margin of error for the given values of c , , and n . c = 0 . 9 7 5 , n = 4 9 , = 4 . 7
-
Square raised their first round of venture capital by issuing Series A preferred stock, which is convertible into common stock on a 1-1 basis and has a non-participating 1x conventional liquidation...
-
Managing Scope Changes Case Study Scope changes on a project can occur regardless of how well the project is planned or executed. Scope changes can be the result of something that was omitted during...
-
Figure 11-31 shows a cooling curve for a Pb-Sn alloy. Determine (a) The pouring temperature; (b) The superheat; (c) The liquidus temperature; (d) The eutectic temperature; (e) The freezing range; (f)...
-
In the radar system of Example 11.4, show that the ROC in Figure 11.2 is the result of a Neyman-Pearson test. That is, show that the Neyman-Pearson test is a threshold test with acceptance set A0 =...
-
Evaluate the integral. 3xx + 6x - 4 (x + 1)(x + 2) - dx
-
Pops Ltd buys shares in Sub 1 and Sub 2 on 31 December 2007. You are to draft the consolidated balance sheet as at 31 December 2008 from the following: Pops Balance Sheet as at 31 December 2008 E...
-
In August of 2009 the capital structure of the Emerson Electric Corporation (EMR) (measured in book and market values) appeared as follows: What weights should Emerson use when computing the firms...
-
Question 3 A multinational corporation established a division in Germany as a subsidiary corporation, with an initial investment in total assets of 13 million ?'s, which cost the company...
-
You work at DeliWine, a US wine retailer. DeliWine sources one of their best selling wines, JeanRose, from a Dutch wine distributor. The cost of placing an order is $ 513 and the annual holding cost...
-
Taeko Inc. is considering an investment in a new machine to increase production capacity. Taeko spent $35,000 on a feasibility study that recommended the purchase of this particular machine. The...
-
What does a change in the reported unit cost of a particular productimply about the economic costs of that product? Also, identify one specific condition when a change in the reported unit cost of a...
-
Identify issues relevant to a corporation's funding choice between debt and equity. A corporation must determine how it plans to finance its investment decisions. A business must consider its current...
-
What role does the cost allocation method (which is already in place) play in the method of revenue allocation? Which method would division managers prefer?
-
Give 2 examples of factors which affect the maintenance of stock levels.
-
Jackson Corp. (a U.S.-based company) sold parts to a Korean customer on December 16, 2021, with payment of 20 million Korean won to be received on January 15, 2022. The following exchange rates...
-
In the early colonial period, what did you find to be most strange, off-putting or alien to your own beliefs and values (your response could include events, ideas, or persons). What did you find to...
-
Tiger, Inc. signed a lease for equipment on July 1, 2007.The lease is for 10 years (the useful life of the asset).The first of 10 equal annual payments of $500,000 was made on July 1, 2007.The...
-
Matta Leasing Limited, which has a fiscal year end of October 31 and follows IFRS 16, signs an agreement on January 1, 2020, to lease equipment to Irvine Limited. The following information relates to...
-
Refer to the data for Duster Corporation's defined benefit pension plan in BE19.9. Now assume that the company follows ASPE instead of IFRS. Determine the 2020 effect of the pension plan on pension...
-
LEW Jewellery Corp. uses gold in the manufacture of its products. LEW anticipates that it will need to purchase 500 ounces of gold in October 2020 for jewellery that will be shipped for the holiday...
-
Which statement is false? a. SAS No. 99 does not mention forensic accounting. b. SAS No. 99 does not require auditors to make inquiries of "others" as opposed to management. c. Many of the companies...
-
What is not required by SOX companies? a. CEO may not be chairperson of BOD. b. Auditors must report to audit committee on a timely basis. c. Rotation of lead auditor every five years. d. Internal...
-
What would not be a red flag with horizontal analysis? a. Accounts receivable is rising faster than revenue. b. Cash flow is increasing faster than net income. c. Deferred revenues remain steady. d....
Study smarter with the SolutionInn App