Question
1. Suppose founders own 50% of company ZYG and VCs preferred stock shares are convertible at $1 per share. VC#1 has already put in $2M
1. Suppose founders own 50% of company ZYG and VCs preferred stock shares are convertible at $1 per share. VC#1 has already put in $2M for 2M shares. In 18 months, an infusion of another $2M from VC#2 is needed priced at $0.50 per share (down round).
a) If there is no full ratchet, (i) what is ownership after new round of (i) VC#1, (ii) founders, (iii) VC#2?
b) What is ownership of three parties after full ratchet?
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Foundations Of Financial Management
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta
11th Canadian Edition
1259024970, 978-1259265921
