I already did all of the instructions but I need help answering the questions at the bottom using the data.

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% of Ownership After Round of Funding

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?
5. In general terms, explain how the percentage of ownership, retention, percentage of ownership with retention and number of shares issued to each investor are obtained?

1) List financing rounds, funding amount per round, year of funding, required returns and estimated earnings at terminal value. 2) Using merited metric, calculate estimated market value at terminal horizon. 3) Discount terminal horizon value back to each respective funding round using the required return. To determine the respective PV at each funding round. Start with the earliest funding round and move chronologically forward. 4) Calculate ownership by taking amount of funding divided by respective discounted company value at time of each round of funding. This percentage equals the fully diluted ownership percentage once all rounds and all planned shares are distributed. 5) To calculate Retention Ratio Per Round start with the latest funding round and move progressively forward. Retention ratio equals the increase in percentage of ownership each investor must retain to ensure they are not diluted below their target ownership by subsequent rounds. Earlier rounds account for dilution in subsequent rounds by dividing their target percentage of their ownership by the product of (1- retention rate in each previous round) (see equations in rows 3-6, column I). 6) Ownership % with retention (1) equals % Ownership (H) divided by Retention Ratio Per Round (1). 7) Investor Shares at funding round (K) = The number of shares that must be issued to the investor in the respective round so that after issue, the investor's ownership percentage is equal to the respective value in column J. 8) Total shares issued is equal to shares issued before the funding round plus those issued during the funding round. 9) Price per share is the amount of funding in the respective round divided by the number of shares issued. 10) Post money value is the total number of shares outstanding after new shares are issued (L) times price per share (M) 11) Pre-Money value is Post money value less the value funded in the respective round. 12) % of Ownership After Round of Funding shows the impact of dilution with each subsequent round of funding and issuance of new shares on each investor and the Original Owners. % of Ownership After Round of Funding Earnings at Terminal Value Millions Price per Year Amount Financing in Round Millions 1 $ 6 2 $ 8 3 $ 12 Merited PE at Respective Terminal 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 % Ownership at Investor Ratio Per Round with shares at Total issued Round retention funding round shares 63.7% 65.8% 1,923,849.11 2,923,849.11 $ 76.6% 16.7% 587,356.78 3,511,205.89 $ 85.0% 9.9% 387,585.76 3,898,791.65 $ 0 2 After Incentive share Post Money Value Pre-Money Value Round 1 Round 2 Round 3 Pool 3.12 $ 9,118,747.71 $ 3,118,747.71 65.80% 54.8% 49.3% 41.9% 13.62 $ 47,823,823.41 $ 39,823,823.41 16.7% 15.1% 12.8% 30.96 120,710,059.17 $ 108,710,059.17 9.9% 8.5% Orig. Owners 34.20% 28.5% 25.6% 21.8% 15% Total Ownership 100.00% 100.00% 100.00% 100.00% 4 $ 6 12 Retained for Employee incentive pool Number of shares outstanding at time 0 15% 1,000,000 1) List financing rounds, funding amount per round, year of funding, required returns and estimated earnings at terminal value. 2) Using merited metric, calculate estimated market value at terminal horizon. 3) Discount terminal horizon value back to each respective funding round using the required return. To determine the respective PV at each funding round. Start with the earliest funding round and move chronologically forward. 4) Calculate ownership by taking amount of funding divided by respective discounted company value at time of each round of funding. This percentage equals the fully diluted ownership percentage once all rounds and all planned shares are distributed. 5) To calculate Retention Ratio Per Round start with the latest funding round and move progressively forward. Retention ratio equals the increase in percentage of ownership each investor must retain to ensure they are not diluted below their target ownership by subsequent rounds. Earlier rounds account for dilution in subsequent rounds by dividing their target percentage of their ownership by the product of (1- retention rate in each previous round) (see equations in rows 3-6, column I). 6) Ownership % with retention (1) equals % Ownership (H) divided by Retention Ratio Per Round (1). 7) Investor Shares at funding round (K) = The number of shares that must be issued to the investor in the respective round so that after issue, the investor's ownership percentage is equal to the respective value in column J. 8) Total shares issued is equal to shares issued before the funding round plus those issued during the funding round. 9) Price per share is the amount of funding in the respective round divided by the number of shares issued. 10) Post money value is the total number of shares outstanding after new shares are issued (L) times price per share (M) 11) Pre-Money value is Post money value less the value funded in the respective round. 12) % of Ownership After Round of Funding shows the impact of dilution with each subsequent round of funding and issuance of new shares on each investor and the Original Owners. % of Ownership After Round of Funding Earnings at Terminal Value Millions Price per Year Amount Financing in Round Millions 1 $ 6 2 $ 8 3 $ 12 Merited PE at Respective Terminal 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 % Ownership at Investor Ratio Per Round with shares at Total issued Round retention funding round shares 63.7% 65.8% 1,923,849.11 2,923,849.11 $ 76.6% 16.7% 587,356.78 3,511,205.89 $ 85.0% 9.9% 387,585.76 3,898,791.65 $ 0 2 After Incentive share Post Money Value Pre-Money Value Round 1 Round 2 Round 3 Pool 3.12 $ 9,118,747.71 $ 3,118,747.71 65.80% 54.8% 49.3% 41.9% 13.62 $ 47,823,823.41 $ 39,823,823.41 16.7% 15.1% 12.8% 30.96 120,710,059.17 $ 108,710,059.17 9.9% 8.5% Orig. Owners 34.20% 28.5% 25.6% 21.8% 15% Total Ownership 100.00% 100.00% 100.00% 100.00% 4 $ 6 12 Retained for Employee incentive pool Number of shares outstanding at time 0 15% 1,000,000