7. There has been only one round of financing for Snype.com (a Series A investment of $10 million in convertible participating preferred at a $ 15 million pre-money valu ation). If converted, the Series A investors would own 40% of the company ($10M/ ( $10M + $15M)) and the entrepreneur would own 60%. The company has an offer to be acquired for $70M. The Series A preferred shares have a liquidation preference of 1X and participate with a 3X cap. (15 points) (a) Under the capped liquidation preference how much money would the Series A investor receive? (b) By converting to common stock, how much would the investor receive? (c) Is it better to convert or take the liquidation preference? 8.The entrepreneur is trying to fund her firms short-term needs. She has two options. A short-term bank loan that costs 18% per year. The other option is to use trade credit financing. The terms of trade credit financing are 3/10 net 30. Which source should she prefer and why? (10 points) 7. There has been only one round of financing for Snype.com (a Series A investment of $10 million in convertible participating preferred at a $ 15 million pre-money valu ation). If converted, the Series A investors would own 40% of the company ($10M/ ( $10M + $15M)) and the entrepreneur would own 60%. The company has an offer to be acquired for $70M. The Series A preferred shares have a liquidation preference of 1X and participate with a 3X cap. (15 points) (a) Under the capped liquidation preference how much money would the Series A investor receive? (b) By converting to common stock, how much would the investor receive? (c) Is it better to convert or take the liquidation preference? 8.The entrepreneur is trying to fund her firms short-term needs. She has two options. A short-term bank loan that costs 18% per year. The other option is to use trade credit financing. The terms of trade credit financing are 3/10 net 30. Which source should she prefer and why? (10 points)