Founders F1 and F2 have established a company in the form of a GmbH which is active in the software and information technology business. Each founder owns 25.000 shares. The company has developed a social media app that shows short movie clips uploaded by random people. In light of the great success, the company needs to substantially expand its server capacities and invest in marketing. The founders were not able to secure external financing because the company does not have any significant assets. Therefore, the founders have decided to implement a venture capital financing round on a preferred share issuance basis. The founders decide that the pre-money valuation is 10m Euro. Investor A intends to invest 4m Euro with a liquidation preference of 1.5x. Two years later, the company's capital needs further increase and the founders and investor A decide to pursue another financing round at a pre-money valuation of 16m Euro. Investor B intends to invest 6m Euro with a liquidation preference of 1.5x. Three years later, the company will be sold to a financial sponsor for a purchase price of 30m Euro. How will the exit proceeds in the amount of 30m Euro be distributed among the investors and the founders? Please distinguish between the following alternatives: (A) Investor A and B have both invested in non-participating preferred stock. (B) Investor A and B have both invested in participating preferred stock. (C) Investor A and B have both invested in ordinary stock. (D) Investor A has invested into a convertible loan note with a 30% discount on conversion in the next financing round and Investor B has invested in non-participating preferred stock. Please indicate intermediate results and relevant steps in the calculation. Please round the relevant numbers appropriately. Founders F1 and F2 have established a company in the form of a GmbH which is active in the software and information technology business. Each founder owns 25.000 shares. The company has developed a social media app that shows short movie clips uploaded by random people. In light of the great success, the company needs to substantially expand its server capacities and invest in marketing. The founders were not able to secure external financing because the company does not have any significant assets. Therefore, the founders have decided to implement a venture capital financing round on a preferred share issuance basis. The founders decide that the pre-money valuation is 10m Euro. Investor A intends to invest 4m Euro with a liquidation preference of 1.5x. Two years later, the company's capital needs further increase and the founders and investor A decide to pursue another financing round at a pre-money valuation of 16m Euro. Investor B intends to invest 6m Euro with a liquidation preference of 1.5x. Three years later, the company will be sold to a financial sponsor for a purchase price of 30m Euro. How will the exit proceeds in the amount of 30m Euro be distributed among the investors and the founders? Please distinguish between the following alternatives: (A) Investor A and B have both invested in non-participating preferred stock. (B) Investor A and B have both invested in participating preferred stock. (C) Investor A and B have both invested in ordinary stock. (D) Investor A has invested into a convertible loan note with a 30% discount on conversion in the next financing round and Investor B has invested in non-participating preferred stock. Please indicate intermediate results and relevant steps in the calculation. Please round the relevant numbers appropriately