Question
An investor made a $2M seed investment with a convertible note into the company called Sinkhole. At the time of the seed investment there were
An investor made a $2M seed investment with a convertible note into the company called Sinkhole. At the time of the seed investment there were no shares formally issued: the founders owned 100% of the company. The terms on the note included a 15% discount and a $10M valuation cap. For the sake of the questions below, assume there was no interest accrued on the note.
One year later the company received a term sheet with an offer for a Series A investment of $4M at a share price of $1 per share for one third of the company. The term sheet also specified the creation of a 15% option pool, expressed in post-money terms.
- Complete the following cap table associated with this financing:
Investor
Share Count
Ownership %
Founders Common
Option Pool
Noteholder
Series A
TOTAL
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
Financial Instability Toolkit For Interpreting Boom And Bust Cycles
Authors: V. D'Apice, G. Ferri
1st Edition
023024811X, 9780230248113
