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Suppose that EBV makes a $ 6 M Series A investment in Newco for 1 M shares at $ 6 per share.One year later, Newco
Suppose that EBV makes a $M Series A investment in Newco for M shares at $ per share.One year later, Newco has fallen on hard times and receives a $M Series B financing from Talltree for M shares at $ per share. The founders and the stock pool have claims on M shares of common stock.Consider the following cases:Case I: Series A has no antidilution protection.Case II: Series A has full ratchet antidilution protection.For each of these cases, what percentage of Newco fully diluted would be controlled by EBV following the Series B investment? What would be the postmoney and premoney valuations?
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