Question
An Angel Investor makes a Seed Round investment of $750,000 in an entrepreneur's venture using a Simple Agreement for Future Equity (SAFE), as shown below.
An Angel Investor makes a Seed Round investment of $750,000 in an entrepreneur's venture using a Simple Agreement for Future Equity (SAFE), as shown below. What does the capitalization table look like for {Founders & Management, Angel Investor, Series A Investor} subsequent to the Series A round of financing under the following two
Scenarios:
1. The entrepreneur raises $4,000,000 from an investor in a Series A round in return for 40% of company's equity. Assume no option pool prior to or concurrent with Series A financing.
2. The entrepreneur raises $4,000,000 from an investor in a Series A round in return for 20% of the company's equity. Assume no option pool prior to or concurrent with Series A financing.
Notes : "Valuation Cap" is $5,000,000. There is a 25% "Discount" to the Series A price.
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