II.1. First round The company V has been financed by a A round consisting in the issue of ordinary shares. The A round has been subscribed by a VC fund (the A round VC). The A round VC was not a shareholder prior to its investment. The A round VC purchased series A ordinary shares at a price of 112.5 per share. After the A round, the capital of the company is divided in 80,000 ordinary shares and the A round VC owns 12.5% of the capital.

Questions 14 to 17 (0.6 point per question): Please calculate

(14) The number of shares issued, and purchased by the A round VC, at the A round?

(15) The amount invested by the A round VC?

(16) The post-money value of the share issue after the A round?

(17) The pre-money value of the share issue at the A round?

II.2. Second round The company V realises a new round of financing, the B round, consisting in the issue of ordinary shares, for 1.5 m, at a pre-money value of 6.0 m. The share issue is subscribed by a new VC fund (the B round VC), in ordinary shares.

Questions 18 to 21 (0.6 point per question): Please calculate

(18) The issue price per share at the B round?

(19) The number of new shares issued, and purchased by the B round VC, at the B round?

(20) The post-money value of the share issue after the B round?

(21)The % ownership of the A round VC after the B round?

II.3. Introduction of preferred shares and rachet at round A We now assume that, at the A round, the A round VC has negotiated: (a) an investment in preferred shares (series A preferred), with a non-participating preference of 1.0x and (b) on top of its preference, a full rachet in case of conversion of the series A preferred shares into ordinary shares1.

Questions 22 and 23 (0.6 point per question):

Please calculate (22) The % of the capital of V that the A round VC should own, after triggering the full rachet at round B, if it converts the series A shares into ordinary shares? (23)Assuming that company V is sold,after round B at a10m equity value,should the Around VC opt for: (a) the preference or (b) for the conversion of the series A preferred shares and the trigger of the full rachet clause in order to maximise its return? 1 A full rachet adjusts the number of ordinary shares obtained by conversion of the series A shares such that the cost 4 of the A round VC investment equates the post-money value of the B round.