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Convertible Preferred shares with 2X liquidation preference The founders of the start-up need additional capital to expand the business and they arrange an A of
Convertible Preferred shares with 2X liquidation preference The founders of the start-up need additional capital to expand the business and they arrange an "A" of financing with a venture capital firm that agrees to provide $4,000,000 in exchange for 40% ownership; however, to invest in the start-up the Series "A" investors require Convertible Preferred shares a 2X liquidation preference and the shares have senior priority in receiving all proceeds from a sale or liquidation. The original investment amount is $4,000,000 Owners/Investors Security Shares Percent Investment Founders Series A Common Convertible Preferred 6,000,000 60% 4,000,000 40% Share Price $100,000 $0.0167 $4,000,000 $1.00
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