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Suppose VC#1 has already invested $3M in venture for 1M shares, resulting in founders owning 60% of company. In 18 months, an infusion of a

Suppose VC#1 has already invested $3M in venture for 1M shares, resulting in founders owning 60% of company. In 18 months, an infusion of a $1M from VC#2 is needed priced at $2 per share. Assuming no ratchet provision, answer a, b, and c.

a) What is proportion of shares owned by VC#2 after new round?

b) What is the proportion of shares owned by VC#1 after new round?

c) What is proportion of shares owned by founders after new round?

Assuming full ratchet provision is in the term sheet, answer d and e.

d) What is the ownership of VC#1?

e) What is ownership of VC#2?

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