Marlie's and Tortie's venture Borsolona produces reusable plastic-like shopping bags made out of used tea leaves....

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Marlie's and Tortie's venture Borsolona produces reusable plastic-like shopping bags made out of used tea leaves. They managed to obtain financing from Lissilo Ventures through convertible preferred stock. They secured an investment of $3M at a pre-money valuation of $9M. A. Compute Lissilo's ownership share. The convertible's preferred terms are given by a liquidation preference of 1.5x and a dividend of 8% per year. The expected exit is projected four years down the road. B. Compute Lissilo's preferred terms at the expected time of exit. C. Compute the conversion threshold for this security at the expected time of exit. D. What is the conversion threshold if the exit occurs two years after financing? E. What would be the cash flow to Marlie and Tortie if Borsolona was sold at $30M after four years? Just before agreeing with Lissilo, the two founders also receive a financing offer from Pressilo Partners, another venture firm that is very active in packaging and distribution supply chains. Pressilo offers a more attractive pre-money valuation of $12M and offers to invest through participating preferred stock with the same preferred terms as Lissilo. F. Compute the cash flow to the founders if Borsolona is sold at $30M after four years. G. Which offer should Marlie and Tortie accept? H. Would Marlie and Tortie change their choice with a cap to the participating at $18M? Marlie's and Tortie's venture Borsolona produces reusable plastic-like shopping bags made out of used tea leaves. They managed to obtain financing from Lissilo Ventures through convertible preferred stock. They secured an investment of $3M at a pre-money valuation of $9M. A. Compute Lissilo's ownership share. The convertible's preferred terms are given by a liquidation preference of 1.5x and a dividend of 8% per year. The expected exit is projected four years down the road. B. Compute Lissilo's preferred terms at the expected time of exit. C. Compute the conversion threshold for this security at the expected time of exit. D. What is the conversion threshold if the exit occurs two years after financing? E. What would be the cash flow to Marlie and Tortie if Borsolona was sold at $30M after four years? Just before agreeing with Lissilo, the two founders also receive a financing offer from Pressilo Partners, another venture firm that is very active in packaging and distribution supply chains. Pressilo offers a more attractive pre-money valuation of $12M and offers to invest through participating preferred stock with the same preferred terms as Lissilo. F. Compute the cash flow to the founders if Borsolona is sold at $30M after four years. G. Which offer should Marlie and Tortie accept? H. Would Marlie and Tortie change their choice with a cap to the participating at $18M?