In the trendsetter.com, the company received two term sheets from Alpha and Mega venture funds.

For the purposes of this exercise, let's assume that the two term sheets were equivalent except for anti$-$dilution protection. In other words, let's say that the investment in each case was $$5,000,000$ at $$1\mathrm{.}00$ per share of Series A preferred stock.

Post Series A financing, the company had a valuation of $$12,000,000$ and the following cap table:

Common stock $7,000,000$ shares $58\mathrm{.}3\%$

Series A $5,000,000$ shares $41\mathrm{.}7\%$

Total $12,000,000$ shares $100\mathrm{.}0\%$

Question #$1$

A new investor offers to invest $$3\mathrm{.}0$ million at $$0\mathrm{.}50$ per share. What is the post$-$financing value of the

company and what does the company's cap table look like in the following cases:

a$.$ no antidilution protection

b$.$ full ratchet antidilution protection

c$.$ weighted average antidilution protection

NCP $=$ OCP $*($OB$+($NM $/$ OCP$))/($OB $+$ SI$)$

NCP $=$ new conversion price

OCP $=$ old conversion price

OB $=$ number of shares outstanding before this round

NM $=$ new money being invested in this round

SI $=$ new shares issued in this round

ADP $=$ OBA$*($OCP$/$NCP$)-$OBA

ADP $=$ antidilution protection

OBA$=$ number of Series A shares outstanding before this round

NCP $=$ new conversion price

OCP $=$ old conversion price