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Suppose a VC fund invests $10M for 20% of a startup in the form of convertible preferred stock with a 1x liquidation preference and a

Suppose a VC fund invests $10M for 20% of a startup in the form of convertible preferred stock with a 1x liquidation preference and a $100M automatic conversion threshold. Assuming the startup does not raise any additional rounds of financing in the future:

 

a) How much will the VC fund get if the startup is acquired for $40M?

 

b) How much will the VC fund get if the startup is acquired for $200M?

 

c) How much will the VC fund get if the startup goes public and is valued at $200M at the time the VC fund can sell its shares?

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