Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

18. Suppose that EBV makes a $6M Series A investment in Newco for 6M shares at $1 per share. One year later, Newco has fallen

image text in transcribed
18. Suppose that EBV makes a $6M Series A investment in Newco for 6M shares at $1 per share. One year later, Newco has fallen on hard times and receives a $8M Series B financing from Talltree for 8M shares at $1 per share. The founders and the stock pool have claims on 3M shares of common stock. Series A has full-ratchet antidilution protection. What percentage of Newco (fully diluted) would be controlled by EBV following the Series B investment? What would be the post-money and pre-money valuations? A. EBV series A ownership = 25.26%; post-money valuation = $17M; pre-money valuation=$9M B. EBV series A ownership = 15.29%; post-money valuation = $16M; pre-money valuation=$8M C. EBV series A ownership = 35.29%; post-money valuation = $16M; pre-money valuation=$8M D. EBV series A ownership = 35.29%; post-money valuation = $17M; pre-money valuation=$9M

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Global Corporate Finance A Focused Approach

Authors: Suk Hi Kim, Kenneth A Kim

2nd Edition

9814618004, 9789814618007

More Books

Students also viewed these Finance questions

Question

identify the main types of research studies in HRM research;

Answered: 1 week ago

Question

decide what data to gather and when;

Answered: 1 week ago