Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A fictitious VC firm, EBV, that is considering a series A investment in a start-up company named Newco. The terms specify that EBV invests $5

image text in transcribed
image text in transcribed
A fictitious VC firm, EBV, that is considering a series A investment in a start-up company named Newco. The terms specify that EBV invests $5 million into Newco for 5M shares, which currently has 10M shares allotted to employees and founders. There are five structures that defines the wealth to VCs ($VC in vertical axis) against the exit value of portfolio firm ($W in horizontal axis). Choose the correct structure listed in the following that matches the diagram given in the question. Identify the security structure of the following diagram. Series A Slope 113 5 $W O 5M shares of common. RP + 5M shares of common. OPCP with participation as-if 5M shares of common, QPO at $5 per share. O PCPC with participation as-if 5M shares of common, with liquidation return capped at four times OPP, QPO at $5 per share. ORP ($4M APP) + 5M shares of CP ($1M APP)

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_2

Step: 3

blur-text-image_3

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

Personal Finance Guides And Advice

Authors: Riley E. Cole

1st Edition

B0C6VWKH57, 979-8396903944

More Books

Students also viewed these Finance questions