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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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