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A VC holds 2 million shares of participating preferred stock in Company A , which were purchased for $ 1 0 million. The founders are

A VC holds 2 million shares of participating preferred stock in Company A, which were purchased for $10 million. The founders are the only other shareholders and own 5 million shares of common equity. The liquidation preference is 1X and there is a 5% accruing and compounding dividend.
a. The company is sold for $50 million after 5 years, how much will the VC1 recieve? b. Now assume VC has participating preferred with a 1X LP and a 5% accruing and compounding dividend. Before exit, the company raised an additional $20M from VC2 in exchange for non-participating preferred stock with a liquidation preference equal to 1.5X and no dividends. If the company is sold for $50M and follows a last-in-first-out model for liquidation. How much would the first VC receive? How much would VC2 receive? How much would the founders receive?

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