Question
Founders and ESOP have 2 million shares. You have terms to raise $1 million through a convertible note from two different angels: Angel 1 Angel
Founders and ESOP have 2 million shares. You have terms to raise $1 million through a convertible note from two different angels:
| Angel 1 | Angel 2 | |
| Discount of Series A price-per-share | 20% | 30% |
| Cap on Series A pre-money valuation | $30 million | None |
Series A investment: $50 million
Question: For which range of Series A post-money valuations do Angel 1 terms lead to less founder dilution that Angel 2 terms?
Step by Step Solution
3.33 Rating (147 Votes )
There are 3 Steps involved in it
Step: 1
To compare the dilution caused by the two different angel investment terms we need to calculate the ...
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Foundations of Financial Management
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta
10th Canadian edition
1259261018, 1259261015, 978-1259024979
