1. PunchTab has 1,000,000 shares of common stock in a seed round. They raise $750,000 in a convertible note from an angel investor in the seed round. Conversion is triggered if there is a priced equity financing round with 20% price discount or capped value of PunchTab's interest at $6,000,000.

Suppose the Series A investor invests $3,000,000 for 20% of shares. Under $6,000,000 cap, what's the implied cap value of seed shares?

• $6
• $7
• $5
• $4

2. PunchTab has 1,000,000 shares of common stock in a seed round. They raise $750,000 in a convertible note from an angel investor in the seed round. Conversion is triggered if there is a priced equity financing round with 20% price discount or capped value of PunchTab's interest at $6,000,000.

Suppose the Series A investor invests $3,000,000 for 20% of shares. Under $6,000,000 cap, what's the implied share price?

• $17.78
• $7.11
• $10.67
• $14.22

3. PunchTab has 1,000,000 shares of common stock in a seed round. They raise $750,000 in a convertible note from an angel investor in the seed round. Conversion is triggered if there is a priced equity financing round with 20% price discount or capped value of PunchTab's interest at $6,000,000.

Suppose the Series A investor invests $3,000,000 for 20% of shares. Under $6,000,000 cap, what's the angel investor's percentage of ownership?

• 6.25%
• 8.89%
• 15.00%
• 9.38%

4. PunchTab has 1,000,000 shares of common stock in a seed round. They raise $750,000 in a convertible note from an angel investor in the seed round. Conversion is triggered if there is a priced equity financing round with 20% price discount or capped value of PunchTab's interest at $6,000,000.

Suppose the Series A investor invests $3,000,000 for 20% of shares. Under 20% price discount, what's the implied share price?

• $3.58
• $27.06
• $11.06
• $15.06

5. PunchTab has 1,000,000 shares of common stock in a seed round. They raise $750,000 in a convertible note from an angel investor in the seed round. Conversion is triggered if there is a priced equity financing round with 20% price discount or capped value of PunchTab's interest at $6,000,000.

Suppose the Series A investor invests $3,000,000 for 20% of shares. Under 20% price discount, what's the total shares?

• 1,355,932
• 1,311,475
• 1,395,349
• 1,327,801

6. PunchTab has 1,000,000 shares of common stock in a seed round. They raise $750,000 in a convertible note from an angel investor in the seed round. Conversion is triggered if there is a priced equity financing round with 20% price discount or capped value of PunchTab's interest at $6,000,000.

Suppose the Series A investor invests $3,000,000 for 20% of shares. Under 20% price discount, what's the angel investor's percentage of ownership?

• 3.75%
• 6.25%
• 4.69%
• 9.38%

7.

An entrepreneur is considering investing in a new venture Uncertain demand can be high, or low The decision: Build a large facility ($750,000) Build a small facility ($600,000) Don't build Entrepreneur invests $400,000 An outside investor provides the balance and gets 1% of the equity for each $10,000 invested Large restaurant, then investor gets 35% equity Small restaurant, then investor gets 20% equity . Entrepreneur retains balance of the equity Total facility PV conditional on size and demand: Demand Size Large Small O Don't build Low (prob. = 50%) O Build a small facility O Build a large facility $300,000 What action should the entrepreneur make? $400,000 High (prob. = 50%) $1,500,000 $800,000