Assume that EBV invested $6MM in DoOrDie at the terms above, and it is now one year later. Talltree is considering an $8M Series B investment in DoOrDie. Talltree proposes to structure the investment as 5M shares of CP. The employees (founders and option pool) of DoOrDie have claims on 10M shares of common stock, and the previous venture investors (EBV) hold 5M shares of Series A CP. Thus, following the Series B investment, DoOrDie will have 10M common shares outstanding and would have 20M shares outstanding upon conversion of all the CP. Talltree estimates a 50 percent probability for a successful exit, with an expected exit time in four years. On a 4 year investment, Talltree requires a 3.5x multiple of money.

48. If DoOrDie expects no further need for capital investment prior to the IPO, what is your investment recommendation to Talltree, for or against the proposed investment?

A. For B. Against

49. In your analysis of the above decision, what present Valuation of the Talltree investment in DoOrDie did you come up with ($000,000)?

A. 300.0 B. 49.75 C. 75.0 D. 85.71 E. 21.43

50. In your analysis of the above decision, what is the absolute minimum number of shares Talltree needs to make a $8MM investment in DoOrDie and still hit their target return taking into account their required multiple of money (000,000)?

A. 2.25 B. 8.0 C. 10.0 D. 1.40 E. 5.0

51. Assuming DoOrDie goes forward with the Talltree investment as above, what are the founders shares worth per share at exit?

A. $20 B. $15 C. $10 D. $18 E. $5