Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please help I will upvote if correct (answer the next 3 questions with the following information.) A fictitious VC firm, EBV, that is considering a

Please help I will upvote if correct
image text in transcribed
image text in transcribed
image text in transcribed
(answer the next 3 questions with the following information.) A fictitious VC firm, EBV, that is considering a series A investment in a start-up company named Newco. The terms specify that EBV invests $5 million for 5M shares into Newco, which currently has 10M shares allotted to employees and founders. Security structure is as follows: First pay [one] times the Original Purchase Price on each share of Series A Preferred. Thereafter, the Series A Preferred participates with the Common Stock pro rata on an as-converted basis. The liquidation return is capped at four times OPP. EBV has committed capital of $100M with 2% management fee. GP\% is 10%. If the exit value is $72, how much is the distribution to the VC? $32M $27.3 $24M $10.7M What is the exit equation? V(2/3)C(5)(1/3)C(50)+(1/3)C(60)C(12)C(18)+(1/2)C(24)(1/6)C(36)VC(12)C(18)+(1/2)C(24)(1/6)C(36)VC(12)+(1/3)C(36)] What is the breakeven valuation? Use vcvTools to answer the question. $33.6M $22.7M $15.63M $5.6M

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Managerial Finance Essentials

Authors: Charles O. Kroncke, Alan E. Grunewald, Erwin Esser Nemmers

2nd Edition

0829901590, 978-0829901597

More Books

Students also viewed these Finance questions