Assuming a $24 million exit, Calculate Red Baron Venture Partner's common share proceeds using the Red Baron term sheet (Exhibit):  

 

Comparison of Term Sheets Top Gun Term Pre-money Valuation Investor Equity Share Founders' Equity (diluted) Employee Pool Investment Amount Split Round Security Type Liquidation preference Participation Dividends Automatic Conversion Conversion Rate Anti-dilution Board Composition Founder Vesting Pay-to-Play Fees for Diligence $5M 48.5% 26.48% 25% $4M No Convertible Preferred 1X No 8% annual, pari passu $40M offer price Pre-$ value $300M >50% preferred appr 1:1 Weighted Average 1 of 3 chosen by investors Not addressed No Up to $30,000 Red Barron $6M 53.3% 31.7% 15% $6M Yes, 2nd VC investor Convertible Participating Pref'ed 1X Capped at 2.5X As converted $30M offer price 5X original purchase >66% preferred appr 1:1 Full Ratchet 2 of 3 chosen by investors 4 years Yes Up to $30,000 Preference Red Barron Top Gun Red Baron Red Baron Top Gun Top Gun Red Baron Equal Top Gun Top Gun Top Gun Red Baron Top Gun