Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A VCPE firm is considering a $10M Series A investment for 5M shares of preferred stock at $2 per share. The proposed capitalization table for

A VCPE firm is considering a $10M Series A investment for 5M shares of preferred stock at $2 per share. The proposed capitalization table for the new venture is as follows:

Pre-financing

Post-financing

No. of Shares

No. of Shares

Founder (Common)

7,750,000

7,750,000

Employee Stock Pool (Common)

Issued

Unissued

2,250,000

300,000

1,950,000

2,250,000

300,000

1,950,000

Series A (Preferred)

0

5,000,000

a. What is the pre-money valuation? (4 Points)

b. What is the post-money valuation? (4 Points)

c. What is the fully diluted share count? (4 Points)

d. What is the proposed ownership percentage of Series A investor? (4 Points)

e. What is the diluted percentage of the founder post-financing? (4 Points)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

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

Quantitative Methods For Business

Authors: David Anderson, Dennis Sweeney, Thomas Williams, Jeffrey Cam

11th Edition

978-0324651812, 324651813, 978-0324651751

Students also viewed these Economics questions