Series A VC specified the following security in the term sheet. PCPC with participation as-if 5M shares of common, with liquidation return capped at four times OPP, and with the liquidation preference of 1X.

A. Show the exit diagram with all values indicated in the diagram, i.e. inflection point when slope changes and conversion conditions. Show what x-axis and y-axis represent.

B. Suppose the portfolio company is acquired at an exit value of $35M. How much is the share of founder and Series A investor?

Pre-Financing # of Shares % 7,750,000 Post-Financing # of Shares % 7,750,000 77.5 51.7 Security Common - Founders Common Employee Stock Pool Issued Unissued 2,250,000 300,000 1,950,000 22.5 3.0 19.5 2,250,000 300,000 1,950,000 15.0 2.0 13.0 Series A Preferred 0 0.0 5,000,000 33.3 Total 10,000,000 100 15,000,000 100 Pre-Financing # of Shares % 7,750,000 Post-Financing # of Shares % 7,750,000 77.5 51.7 Security Common - Founders Common Employee Stock Pool Issued Unissued 2,250,000 300,000 1,950,000 22.5 3.0 19.5 2,250,000 300,000 1,950,000 15.0 2.0 13.0 Series A Preferred 0 0.0 5,000,000 33.3 Total 10,000,000 100 15,000,000 100