1. How much is terminal value and how was it derived?
2. What are the required returns for each investor's specific round of financing? How do they compare to each other and why are they different?
3. What is the process used to determine an investor's present value relative to their round of financing?
4. Why did the owners desire to hold back 15% for employee incentive stock plans? As a prospective investor is this a welcome provision? Why or why not?

A B C D G H T J K L M N 0 P Q R S % of Ownership After Round of Funding Earnings at Terminal Value Millions Terminal Year Financing Amount in Round Millions 1 $ 6 2 $ 8 3 $ 12 2 3 4 5 Merited PE at Respective values at Value specific year % Ownership $ 14.31 41.9% $ 62.47 12.8% $ 142.01 8.5% 20 $ 240 Required Return 60% 40% 30% Retention Ratio Per Round 63.7% 76.6% 85.0% % Ownership at Round with retention 65.8% 16.7% 9.9% 0 Round 1 65.80% Investor shares at funding round 1,923,849.11 587,356.78 387,585.76 Total issued shares Price per share Post Money Value Pre-Money Value 2,923,849.11 $ 3.12 $ 9,118,747.71 $ 3,118,747.71 3,511,205.89 $ 13.62 $ 47,823,823.41 $ 39,823,823.41 3,898,791.65 $ 30.96 $ 120,710,059.17 $ 108,710,059.17 Orig. Owners Round 2 54.8% 16.7% 2 Round 3 49.3% 15.1% 9.9% 25.6% After Incentive Pool 41.9% 12.8% 8.5% 21.8% 15% 100.00% 4 6 6 $ 12 34.20% 28.5% Total Ownership 100.00% 100.00% 100.00% 15% 1,000,000 7 8 Retained for Employee incentive pool 9 Number of shares outstanding at time 0 10 11 12 13 A B C D G H T J K L M N 0 P Q R S % of Ownership After Round of Funding Earnings at Terminal Value Millions Terminal Year Financing Amount in Round Millions 1 $ 6 2 $ 8 3 $ 12 2 3 4 5 Merited PE at Respective values at Value specific year % Ownership $ 14.31 41.9% $ 62.47 12.8% $ 142.01 8.5% 20 $ 240 Required Return 60% 40% 30% Retention Ratio Per Round 63.7% 76.6% 85.0% % Ownership at Round with retention 65.8% 16.7% 9.9% 0 Round 1 65.80% Investor shares at funding round 1,923,849.11 587,356.78 387,585.76 Total issued shares Price per share Post Money Value Pre-Money Value 2,923,849.11 $ 3.12 $ 9,118,747.71 $ 3,118,747.71 3,511,205.89 $ 13.62 $ 47,823,823.41 $ 39,823,823.41 3,898,791.65 $ 30.96 $ 120,710,059.17 $ 108,710,059.17 Orig. Owners Round 2 54.8% 16.7% 2 Round 3 49.3% 15.1% 9.9% 25.6% After Incentive Pool 41.9% 12.8% 8.5% 21.8% 15% 100.00% 4 6 6 $ 12 34.20% 28.5% Total Ownership 100.00% 100.00% 100.00% 15% 1,000,000 7 8 Retained for Employee incentive pool 9 Number of shares outstanding at time 0 10 11 12 13