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Jones, the investor, proposes taking participating preferred stock1with 1x liquidation preference in return for her $5 million investment. Draw the payoff diagram for this security

  1. Jones, the investor, proposes taking participating preferred stock1with 1x liquidation preference in return for her $5 million investment. Draw the payoff diagram for this security from Jones' perspective, assuming she invests $5 million at a pre-money valuation of $14.75 million with no option pool.
  2. What is her cash-on-cash return (money received divided by investment) if NewVenture exits in December 2020 at a $150 million valuation?

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