Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Square Inc. Financing a Unicorn a) How are venture capital private equity structured? - Who are involved? What are general partners and limited partners? How

Square Inc. Financing a Unicorn

  1. a) How are venture capital private equity structured? -Who are involved? What are general partners and limited partners? How the capital is collected?

b) How are private equity firms compensated? -What are Management fee andCarried interest? How much are they?

c)Why may Khosla Ventures be motivated to push for Square to seek an exit?

2. What characteristics do the firms in case Exhibit 2 have in common? Do you agree with Marc Andressen's thoughts regarding unicorn valuation levels? Why or why not?

3. What would the capitalization table look like after the series E issuance? What is the post-money valuation? Utilize Exhibit 1 for capitalization table

Exhibit 5 for key terms of Series E)

Calculate Series A, D, and E post-money valuation

4. What returns would each class of investors realize if Square exited through an IPO rather than through a sale at valuations of $3 billion, $6 billion, or $9 billion? How would the returns change if the series E securities did not have the IPO ratchet?

5. Do you recommend investing in the series E preferred round?why or why not?

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

Healthcare Finance: An Introduction To Accounting And Financial Management

Authors: Louis Gapenski

6th Edition

1567937411, 978-1567937411

More Books

Students also viewed these Finance questions