Jones, the investor, proposes taking participating preferred stock1 with 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 What is her cash on cash return (money received divided by investment) if NewVenture exits in December 2020 at a $150 million valuation Thompson, the founder, provides a counter proposal in which the security will be a standard convertible preferred stock with a liquidation of 2X Draw the payoff diagram for this security from Jones perspective If NewVenture exits in December 2020 at a $150 million valuation what would be Jones payoff which type of a security would Jones prefer Why At what company valuation would the two securities have an equal payout Please provide detailed explanation of your answers Part A A Venture Capitalist presents Arbuckle, Inc , the shoes manufacturer with the following term sheet for a series A funding round Amount $5 million Security Convertible Preferred Mandatory Conversion Mandatory on IPO $20m, and price $4 00 share $1 50 per share Price Liquidation Rights 2x Liquidation preference on merger, sale, or liquidation 3 million shares Option Pool (employees) Founder Shares 3 million shares Dividends Redemption No Anti dilution Full Ratchet

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Jones, the investor, proposes taking participating preferred stock1 with 1x liquidation preference in return for her $5 million investment. Draw the payoff diagram for this

Please provide detailed explanation of your answers. Part A A Venture Capitalist presents Arbuckle, Inc., the shoes manufactu

Jones, the investor, proposes taking participating preferred stock1 with 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.
What is her cash-on-cash return (money received divided by investment) if NewVenture exits in December 2020 at a $150 million valuation?
Thompson, the founder, provides a counter-proposal in which the security will be a standard convertible preferred stock with a liquidation of 2X. Draw the payoff diagram for this security from Jones’ perspective.
If NewVenture exits in December 2020 at a $150 million valuation what would be Jones payoff? which type of a security would Jones prefer? Why?
At what company valuation would the two securities have an equal payout?

Please provide detailed explanation of your answers. Part A A Venture Capitalist presents Arbuckle, Inc., the shoes manufacturer with the following term sheet for a series A funding round: Amount $5 million Security Convertible Preferred Mandatory Conversion Mandatory on IPO > $20m, and price > $4.00/share $1.50 per share Price Liquidation Rights 2x Liquidation preference on merger, sale, or liquidation. 3 million shares Option Pool (employees) Founder Shares 3 million shares Dividends/Redemption No Anti-dilution Full Ratchet