Objective: The objective of this individual assignment is to develop a capitalization table for an earlystage venture through multiple rounds of financing to illustrate the impacts of outside investment onownership percentages and the value of each owner in the company.For individual assignments, students are expected to turn in work that is their own. Consultation amongstudents for both individual and team assignments is encouraged; however, deliverables includingindividual write ups and spreadsheets should be developed independently by each student.Assignment: Create a capitalization table that shows: 1) the number of shares (units) owned by eachparty, 2) the equity ownership (percentage ownership), and 3) value (in dollars) for each owner at theend of each of 6 stages of venture finance. In the case where ownership is vested over a period of time,calculate ownership based on a fully diluted value (i.e. assume that all the shares vest immediately).Stage 1: Company Formation. Fresh with their knowledge from completing their Innovation andCommercialization class in UWM?s College of Engineering and Applied Science, two studententrepreneurs decide to launch a company. The company will produce a software tool to helpmanage social media profiles, Profile Filter. This innovative tool will be marketed to new collegestudents who want to give their parents the illusion of knowing what?s happening while theirchildren are away at college. The customized Parent Profile will automatically translate postingsto parent-friendly versions. The picture of a raucous house party featuring their precious offspringswilling beer will be automatically transformed into the same participants doing volunteer work at aneighborhood children?s center. The program will employ advanced facial recognition software andhighly realistic virtual reality environments. Recognizing their complementary strengths, the twoentrepreneurs found a company (using an LIC structure commonly employed by startups thatanticipate fund-raising). Founder 1 contributes $7000 in cash for operating capital and Founder 2contributes a computer and software that they agree also has a value of $3000. The divide 100shares (or units In the case of an LIC) between the two founders.Stage 2: Angel Investment. The entrepreneurs know the importance of discovery to entrepreneursas well as a structured approach, so they create a business model canvas to develop their plan. Forthe next three months, the entrepreneurs test the market, refine their proposed product offeringand create a development plan for their minimum viable product that they will used to enter themarket. They do extensive research on the UWM campus ? although it is hard to find beer swillingfreshmen among UWM?s studious undergraduate population ? they manage to reach their potentialcustomers and test their assumptions regarding the value of the business, the key product featuresand the minimum viable product.One of the founders knows a little about software development, so they cobble together aprototype of the code. It has limited facial recognition features and the virtual reality simulationsare a little crude, but the product is good enough to demonstrate.During their hypothesis testing phase, the entrepreneurs reach out to whole network of businessleaders and investors who are anxious to help new ventures grow in Milwaukee. One person who Objective: The objective of this individual assignment is to develop a capitalization table for an earlystage venture through multiple rounds of financing to illustrate the impacts of outside investment onownership percentages and the value of each owner in the company.For individual assignments, students are expected to turn in work that is their own. Consultation amongstudents for both individual and team assignments is encouraged; however, deliverables includingindividual write ups and spreadsheets should be developed independently by each student.Assignment: Create a capitalization table that shows: 1) the number of shares (units) owned by eachparty, 2) the equity ownership (percentage ownership), and 3) value (in dollars) for each owner at theend of each of 6 stages of venture finance. In the case where ownership is vested over a period of time,calculate ownership based on a fully diluted value (i.e. assume that all the shares vest immediately).Stage 1: Company Formation. Fresh with their knowledge from completing their Innovation andCommercialization class in UWM?s College of Engineering and Applied Science, two studententrepreneurs decide to launch a company. The company will produce a software tool to helpmanage social media profiles, Profile Filter. This innovative tool will be marketed to new collegestudents who want to give their parents the illusion of knowing what?s happening while theirchildren are away at college. The customized Parent Profile will automatically translate postingsto parent-friendly versions. The picture of a raucous house party featuring their precious offspringswilling beer will be automatically transformed into the same participants doing volunteer work at aneighborhood children?s center. The program will employ advanced facial recognition software andhighly realistic virtual reality environments. Recognizing their complementary strengths, the twoentrepreneurs found a company (using an LIC structure commonly employed by startups thatanticipate fund-raising). Founder 1 contributes $7000 in cash for operating capital and Founder 2contributes a computer and software that they agree also has a value of $3000. The divide 100shares (or units In the case of an LIC) between the two founders.Stage 2: Angel Investment. The entrepreneurs know the importance of discovery to entrepreneursas well as a structured approach, so they create a business model canvas to develop their plan. Forthe next three months, the entrepreneurs test the market, refine their proposed product offeringand create a development plan for their minimum viable product that they will used to enter themarket. They do extensive research on the UWM campus ? although it is hard to find beer swillingfreshmen among UWM?s studious undergraduate population ? they manage to reach their potentialcustomers and test their assumptions regarding the value of the business, the key product featuresand the minimum viable product.One of the founders knows a little about software development, so they cobble together aprototype of the code. It has limited facial recognition features and the virtual reality simulationsare a little crude, but the product is good enough to demonstrate.During their hypothesis testing phase, the entrepreneurs reach out to whole network of businessleaders and investors who are anxious to help new ventures grow in Milwaukee. One person who
