Answered step by step
Verified Expert Solution
Question
1 Approved Answer
A founder, F, develops a product in his/her garage. F and some family and friends money (call the total FFF) have invested $1MM of their
A founder, F, develops a product in his/her garage. F and some family and friends money (call the total FFF) have invested $1MM of their money in this startup (SU). They award themselves 1MM shares of stock for this investment. After two years, an angel investor (call it A) invests $2MM for 25% of the company in the form of Series A preferred stock. Two years later, a venture capitalist (call it VC) invests $4MM for 20% of the company. 3. Provide the following: Capitalization tables for initial case (post FFF), the post-A investment, and the post-VC investment What are the share prices after the A and VC investment? What is the earnings multiple (final value divided by initial investment for FFF, and A after the VC investment? a. b. c. Now assume that two years later a large corporation (C) buys 100% of the SU for $30 per share. What are the receipts for FFF, A and VC? What was the earnings multiple for each after the acquisition by C
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started