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Square, Inc. raised its first round of venture capital by issuing 10 million shares of Series A preferred stock for $1 per share, which is
Square, Inc. raised its first round of venture capital by issuing 10 million shares of Series A preferred stock for $1 per share, which is convertible into common stock on a 1-1 basis and has a non-participating 1x non-participating liquidation preference. Before the Series A offering, there were 30 million shares of common stock outstanding. One year later, Square needs to raise more capital, so they now plan to issue 5 million shares of Series B preferred stock, which is convertible into common 1-1 and has a non-participating 1x non-participating liquidation preference and a weighted-average ratchet. After meeting with several VC firms in the Valley, they agree on a price of $10 per share. They now have 35 million shares of common stock. [A] Complete the Series B cap table below by filling in the shaded area: Common Series B Round Shares Issued (millions) Price After Conversion Percentage of Common Series A convertible preferred 10 $1.0 3 (3/7) 43% Series B convertible preferred 5 $10.0 5 (5/7) 71% Common shares 35 7 Total shares 3+5+7=150 If Square is acquired 1-year later for $200 million, what is the value of each shareholder's (A, B, and common)
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