• 2.
• a)Assuming that Valhalla were to invest in Telco at a $5 million pre-money valuation, what would be Valhalla's expected Internal Rate of Return (IRR) under the different scenarios described in case Exhibit 1 (page 17)?
• b)What if the investment was made at a $10 million pre-money valuation?
• Please use the information and assumptions in theValhallaExcel file posted on Blackboard to
• help you in your analysis.
• In order to calculate the IRR's, the Excel functionXIRR()will be helpful.
• Note that, as described in the case (page 8), we are assuming that in all scenarios,
• Valhalla makes an investment contribution in Telco's Series B round equal to its pro-rata share. For example, this means that if Valhalla owns 20% of Telco after the Series A and the Series B round is for $10 million, Valhalla will invest 0.210 = $2 million in the Series B round, thus ensuring that Valhalla continues to own 20% of Telco after the Series B (the numbers in this example are made-up - when solving the exercise, you should use the numbers in the Excel file).

• 4.The case states that "Valhalla only made investments with unanimous consent among the general partners."
• a)What are the advantages and disadvantages for a VC firm of requiring unanimity when making investment decisions?
• b)In light of this, do you think that requiring unanimity is a good idea?