Question
Calculate the difference in Max (VC)s ownership in the following scenarios: SpecialStuff raised its A round at $1.50 per share. Max invested $1.5 million for
Calculate the difference in Max (VC)s ownership in the following scenarios: SpecialStuff raised its A round at $1.50 per share. Max invested $1.5 million for one million shares and 30 percent ownership. Sam (Founder) owns 70%. Now SpecialStuff is raising a B round, but the market has turned against it and Acme (new VC) will pay only $1.00 per share for 1 million shares. (Assume that Max doesnt participate at all and allows Acme Ventures to take the whole round.) What is the resulting Maxs ownership if Max has full-ratchet anti-dilution? (Assume that the price of common stock and convertible preferred stock is same for simplicity).
- 40.4%
- 52.2%
- 63.5%
- 31.1%
- None of the above
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Financial Management For Public, Health, And Not-for-Profit Organizations
Authors: Steven A. FinklerDaniel L. Smith, Thad D. Calabrese
6th Edition
978-1506396811, 150639681X
