4 years ago, a firm has issued $4.0 million worth of Series A preferred stock to a VC at a price of $1.0 per share of Series A preferred stock. Series A is entitled to a non-cumulative dividend of 10% (which was never paid out). Moreover, Series A has a 3x liquidation preference and participates on a pro-rata basis with common stock in any proceeds in excess of the liquidation preference. You also know that Series A was granted a standard drag-along clause, according to which the majority of Series A shareholders can force all remaining shareholders to join the sale of the company. There are 16 million shares of common stock outstanding, all of which are owned by the founders. The VC solicits a buyer who is willing to acquire the company at a valuation of $13 million. Carefully answer the following questions: a) How attractive is this takeover bid to the founders? And how attractive is it to the VC? Be specific and show your calculations, if necessary. b) How does the existence of a drag-alonge clause affect the outcome of the takeover bid? c) Looking back as a founder, what should you have negotiated differently before signing the term sheet 4 years ago? Again, be specific and show your calculations