Andreessen Horowitz is considering a $6M Series A investment for 6M shares of convertible preferred of Alpha Fintech at $1 per share. Using the data from the proposed capitalization table below, calculate: a. What are the OPP (original purchase price) and APP (aggregate purchase price) for Series A? b. What is the fully diluted share count? c. What is the proposed ownership percentage? d. What is the post-money valuation? e. What is the pre-money valuation? (20 points) Pre Series A Post-Series A Security # Shares % # Shares % Common-Founders 15,000,000 83.3% Common-Employee Stock Pool 3,000,000 16.7% Issued 600,000 3.3% Unissued 2,400,000 13.3% Series A Preferred 0 0.0% Total 18,000,000 100.0%

5. Suppose that it is one year after Andreessen Horowitzs investment in Alpha Fintech (using the convertible preferred structure used in the previous problem), and Greycroft makes a Series B investment for 6M shares of Alpha Fintech at $.2 per share. Following the Series B investment, what percentage of Alpha Fintech (fully diluted) would be controlled by Andreessen Horowitz under the following scenarios: a. Series A has no anti-dilution protection. b. Series A has full-ratchet anti-dilution protection. c. Series A has broad-based weighted average anti-dilution protection. d. Series A has narrow-based weighted average anti-dilution protection. (20 points)

6. Suppose that the following two funds all with committed capital of $100N have combined to form a syndicate to invest in Alpha Fintech. I. ABC fund, management fees of 2.5% per year of committed capital for all 10 years. II. DEF Fund, management fees of 2.5% per year for the first 5 years, then decreasing by 25 basis points per year in each year from 6 to 10. All fees are calculated based on committed capital. a. Suppose that each fund in the syndicate invests $5M in Alpha Fintech. What is the LP cost of each fund? b. It is possible that the two funds could agree on all the assumptions to the VC method, but still disagree about the wisdom of making this investment. Explain the economic logic behind this possibility.