• Please create separate capitalization tables for the two different scenarios outlined below:
• Cofounders choose the Techstars offer and the optional convertible note described in Exhibit 6a of the case.
• Cofounders choose the Founder.org offer described in Exhibit 6b of the case.

In both cases, assume that:

• The founders currently own 10 million shares of common stock.
• There is currently no stock option pool.
• The three unpriced convertible securities outlined in Exhibit 5 -- Dorm Room Fund's convertible note, Rough Draft Ventures' convertible note, and Founder.org's convertible award -- have a 20% discount and a valuation cap of $3 million
• Notes
• After accepting either offer, the company raises $2 million in a Series A round of financing at a $10 million post-money valuation.
• The Series A financing terms include a provision that the company must create a stock option pool that will equal 10% of the company's fully diluted share after giving effect to the sale of the Series A Preferred. Assume that all convertible notes have the following direction on how to calculate the capped price per share: The capped price per share is calculated as the quotient resulting from diving the valuation cap by the number of outstanding share immediately prior to the Series A round of financing, including all shares of common stock reserved and available for future grant under any equity incentive or similar plan to be created in connection with the Series A round of financing, but excluding the shares of equity securities issuable upon the conversion of the Notes.
• Exhibit 5

Source Amount $209,000 Cumulative sales (Including $21,000 in pre-funded sales via Kickstarter.org) Founder contributions $30,000 Awards/grants HBS Rock Accelerator $5,500 Loans Josh Rothman (friend) OnDeck Capital $30,000 $40,000 $70,000 Convertible notes Dorm Room Fund Rough Draft Ventures Founder.Org $20,000 $12,500 $10,000 $42,500 Total $357,000 Source: Company documents. Exhibit 6b Founder.org Offer Terms, May 2015 Founder.org Convertible Note Principal Amount Interest rate Duration of the note $300,000 5% per year 12 months Qualified Financing of at least $1,000,000 Conversion trigger 25% Discount when converting Cap Price/Valuation Cap Board Seats $3,000,000 Source: Company documents. Source Amount $209,000 Cumulative sales (Including $21,000 in pre-funded sales via Kickstarter.org) Founder contributions $30,000 Awards/grants HBS Rock Accelerator $5,500 Loans Josh Rothman (friend) OnDeck Capital $30,000 $40,000 $70,000 Convertible notes Dorm Room Fund Rough Draft Ventures Founder.Org $20,000 $12,500 $10,000 $42,500 Total $357,000 Source: Company documents. Exhibit 6b Founder.org Offer Terms, May 2015 Founder.org Convertible Note Principal Amount Interest rate Duration of the note $300,000 5% per year 12 months Qualified Financing of at least $1,000,000 Conversion trigger 25% Discount when converting Cap Price/Valuation Cap Board Seats $3,000,000 Source: Company documents