Question
Suppose that EBV makes a $6M Series A investment in Newco for 1M shares at $6 per share. One year later, Newco has fallen on
Suppose that EBV makes a $6M Series A investment in Newco for 1M shares at $6 per share. One year later, Newco has fallen on hard times and receives a $6M Series B financing from Talltree for 3M shares at $2 per share. The founders and the stock pool have claims on 3M shares of common stock. What percentage of Newco would be controlled by EBV following the Series B investment? What would be the post-money and pre-money valuations? Consider the following cases:
Case I: Series A has no antidilution protection.
Choose the correct answer in the following order: % controlled by EBV; post-money; pre-money
Group of answer choices
14.3%; $14M, $8M
14.3%; $20M, $8M
14.3%; $14M, $24M
10.0%; $14M, $8M
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