KateCo.is raisinga Series A round of $2.5 million. KateCo. is willing to grant its Series A investor(s) the following terms: (1) PCP, (2) 1x LiqPref, (3) Narrow Antidilution Provision (4) Right of First Refusal, and (5) Reverse vesting of 24 months.

Lightning Ventures is interested in KateCo. They believe there is a 25% chance that KateCo. could exit in 6 years for 400 million. What's more, they think they could retain at least 60% of their initial investment on a $5 million pre-money valuation. Lightning is a $60 million dollar fund with a 2/20 fee structure. Additionally, Lightning's previous fund returned a 2.8 GVM to its LPs.

If KateCo. fails to meet all milestones and is forced to raise Series B at a pre-money of $8 million, how much dilution with Lightning Ventures assume, given that the original purchase price of Series A was $2.50 and that Thunder Ventures would purchase 1 million shares for $4/share in Series B?

a)15% dilution to Lightning

b)22.5% dilution to Lightning

c)5% dilution to Thunder

d)25% dilution to Lightning

e)No dilution to Lightning