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Suppose that it is one year after Andreessen Horowitzs investment in Alpha Fintech (using the convertible preferred structure used in the previous problem), and Greycroft

Suppose that it is one year after Andreessen Horowitzs investment in Alpha Fintech (using the convertible preferred structure used in the previous problem), and Greycroft makes a Series B investment for 6M shares of Alpha Fintech at $.02 per share. Following the Series B investment,

what percentage of Alpha Fintech (fully diluted) would be controlled by Andreessen Horowitz under the following scenarios:

a. Series A has no anti-dilution protection.

b. Series A has full-ratchet anti-dilution protection.

c. Series A has broad-based weighted average anti-dilution protection.

d. Series A has narrow-based weighted average anti-dilution protection.

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Amount Invested PPS Number Shares Series A $6,000,000 $1.00 6,000,000 Series B $1,200,000 $0.20 6,000,000 Security Common-Founders Common Employee Stock Pool Issued Unissued Series A Preferred Series B Preferred Total Pre Series A # Shares 15,000,000 3,000,000 600.000 2,400,000 0 0 18,000,000 83.3% 16.7% 3.3% 13.3% 0.0% 0.0% 100.0% Post-Series A # Shares 15,000,000 3,000,000 600,000 2,400,000 6,000,000 0 24.000.000 Pre-Series B # Shares % 62.5% 15,000,000 62.5% 12.5% 3,000,000 12.5% 2.5% 600,000 2.5% 10.0% 2.400.000 10.0% 25.0% 6,000,000 25.0% 0.0% 0 0.0% 100.0% 24.000.000 100.0% Post-Series B # Shares % 15,000,000 50.0% 3,000,000 10.0% 600,000 2.0% 2,400,000 8.0% 6,000,000 20.0% 6,000,000 20.0% 30,000,000 100.0% Amount Invested PPS Number Shares Series A $6,000,000 $1.00 6,000,000 Series B $1,200,000 $0.20 6,000,000 Security Common-Founders Common Employee Stock Pool Issued Unissued Series A Preferred Series B Preferred Total Pre Series A # Shares 15,000,000 3,000,000 600.000 2,400,000 0 0 18,000,000 83.3% 16.7% 3.3% 13.3% 0.0% 0.0% 100.0% Post-Series A # Shares 15,000,000 3,000,000 600,000 2,400,000 6,000,000 0 24.000.000 Pre-Series B # Shares % 62.5% 15,000,000 62.5% 12.5% 3,000,000 12.5% 2.5% 600,000 2.5% 10.0% 2.400.000 10.0% 25.0% 6,000,000 25.0% 0.0% 0 0.0% 100.0% 24.000.000 100.0% Post-Series B # Shares % 15,000,000 50.0% 3,000,000 10.0% 600,000 2.0% 2,400,000 8.0% 6,000,000 20.0% 6,000,000 20.0% 30,000,000 100.0%

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