1. Founder and Angel Rounds.

You decide to launch the startup. You file the docs for a C-Corporation and start the company with 20M treasury shares and immediately award yourself 2M shares, (so there are now 2M shares of common stock outstanding). After spending the summer developing a simple prototype of your product/service, you raised $2 million from an angel for seed financing and you hired one experienced VP of Technology, one experienced VP of Marketing, Sale and Business Development, 3 software developers, and yourself.

When you pitched the angel round, you and the angel investor agreed that the company had the ability to become a company that was valued at $250M++ 7 years from now. The angel said that he liked your idea and he even helped you find the people you hired. He thought that the future 7-year value of the company could well-exceed $250M, but taking into risk, he used an expected value of $200M. To further account for risk, the angel priced out his investment to earn a 20X return.

In a spreadsheet, in B2 insert $0 (the Founder is not putting money in the company); in C2 insert the number of shares owned by the Founder; in C3 show the total shares outstanding; and in D1 calculate the % of total stock outstanding owned by the Founder (100%).

For the Seed (angel) round, in E3 show the dollar amount invested by the seed investor. In F2 record the number of shares of stock owned by the Founder; F3 the seed investors (angels) shares of stock owned; and F4 the total number of shares of stock outstanding.

In G2, G3 and G4 calculate the % of total stock owned by the Founder, the Angel, and the total (100%).

In E9 record the post-money value of the company in the seed round. In E10 calculate the pre-money value of the company in the seed round. In E11 calculate the price per share paid by the angel.

2. Series A Round.

Demonstrating the product to an angel introduced VC, we receive and accept a term sheet for $15M. VC A estimates our value at $350M 6 years from now, and VC A prices out his investment in us to earn a 10X return. For the VC Series A round, in H4 show the dollar amount invested by the Series A investor. In I2 record the shares of stock owned by the Founder; I3 the number of shares owned by the angel; I4 the number of shares of stock owned by the Series A investor, and I5 the total number of shares of stock outstanding. In J2, J3, J4 and J5 calculate the % of total stock owned by the Founder, the Angel, the Series A investor and the total (100%). In H9 record the post-money value of the company in the Series A round. In H10 calculate the pre-money value of the company in the Series A round. In H11 calculate the price per share paid by the Series A investor.

3. Series B Round.

VC B estimates a company value of $500M within the next 4 years. He requires a 4X return on his investment and is willing to invest $35M in your company. For the VC Series B round, in K5 show the dollar amount invested by the Series B investor. In L2 record the shares of stock owned by the Founder; L3 the number of shares owned by the angel; L4 the number of shares of stock owned by the Series A investor, L5 and I5 the number of shares of stock owned by the Series B investor and L6 the total number of shares of stock outstanding. In M2, M3, M4, M5 and M6 calculate the % of total stock owned by the Founder, the Angel, the Series A investor, the Series B investor and the total (100%). In K9 record the post-money value of the company in the Series B round. In K10 calculate the pre-money value of the company in the Series B round. In K11 calculate the price per share paid by the Series B investor.

4. Series C Round.

VC C values your company at $600M within 2 years of IPO. He requires a 2X return and is willing to invest $75M in your company. For the VC Series C round, in N6 show the dollar amount invested by the Series C investor. In O2 record the shares of stock owned by the Founder; O3 the number of shares owned by the angel; O4 the number of shares of stock owned by the Series A investor, O5 the number of shares of stock owned by the Series B investor, O6 the number of shares of stock owned by the Series C investor and O7 the total number of shares of stock outstanding. In P2, P3, P4, P5, P6 and P7 calculate the % of total stock owned by the Founder, the Angel, the Series A investor, the Series B investor, the Series C investor and the total (100%). In N9 record the post-money value of the company in the Series C round. In N10 calculate the pre-money value of the company in the Series C round. In N11 calculate the price per share paid by the Series C investor.

5. Series IPO Round.

In IPO round, assume that the company sold new shares of stock at $74/share and raised $200M. For the IPO round, in Q7 show the dollar amount invested by IPO investors. In R2 record the shares of stock owned by the Founder; R3 the number of shares owned by the angel; R4 the number of shares of stock owned by the Series A investor, R5 the number of shares of stock owned by the Series B investor, R6 the number of shares of stock owned by the Series C investor, R7 the number of shares of stock owned by the IPO investors and R8 the total number of shares of stock outstanding. In S2, S3, S4, S5, S6, S7 and S8 calculate the % of total stock owned by the Founder, the Angel, the Series A investor, the Series B investor, the Series C investor, the IPO investors and the total (100%). In Q9 record the post-money value of the company in the IPO round. In Q10 calculate the pre-money value of the company in the IPO round. In Q11 calculate the price per share paid by the IPO investor.

6. After the IPO round all the shares are now valued at $74.what is the value (market cap) of the company now?
7. Suppose that there were no preference calls, so, if the Founder decided to cash out, he would receive their percent of stock owned times the value of the company. What dollar amounts would he have after selling their stock after the Angel round? After the Series A round? After the Series B round? After the Series C round? After the IPO round? (Use Line 13 of the spreadsheet for calculations.)