Question
Real Networks, which was founded by Robert Glaser in 1993, was initially funded with an investment of approximately $1 million by Glaser. As of April
Real Networks, which was founded by Robert Glaser in 1993, was initially funded with an investment of approximately $1 million by Glaser. As of April 1995, Glasers $1 million initial investment in Real Networks represented 13,713,439 shares of Series A preferred stock, implying an initial purchase price of about $0.07 per share. Real Networks needed additional capital and management decided to raise this money by selling equity in the form of convertible preferred stock Real Networks sold 2,686,567 shares of Series B preferred stock at $0.67 per share in April 1995. Calculate the new firm value after Series B investments, and percentage ownership between Glaser (Series A) and Series B investors.
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