Paul venture has $1B in committed capital, a ten year life, 2% management fees, and 20% carry. Carry is based on committed capital. Paul is thinking about $50M series A investment in Nanobattery. The investment would be redeemable preferred with an APP of $40M plus 5 million shares of common plus a choice of either a 2X liquidity preference or dividends of 0.75% a month(the expected holding period is not given). The founders and employees of Nanobattery own 15 million shares of common

1) draw the exit diagram for both alternatives

2) What is the LP valuation for both alternatives if the total valuation is $300M?

3) Which alternative should Paul choose?