The founders were considering a second offer from another investor (lets call them Investor #2) where the founders could have raised the same amount ($85,000) for 20% of the company. Relationally, the founders like and get along with both investors and think each will be a valuable asset to the company. They decided to reject the offer from Investor #2 and took the offer as outlined in the previous question. Why did they decline the offer from Investor #2?

2. Newco founders have raised $85,000 from a Series A investor for 12.5% of the company. The investor has agreed to pay each co-founder a salary of $12,000/year for 2 years. The co-founders and Series A investor believe that Newco can be acquired for $5,000,000 after 2 more years of operation. Complete the Cap Table below and put the correct answers for each shaded box next to the letters below. (20 points) Start Company Series A Angel Financing Payout d. a. Technical Founder Finance/Operations Founder 62.5% 37.596 b. Technical Founder Finance/Operations Founder Investors- Series A Total Equity C. f. Total Equity 100% 100% S 5,000,000 Acquired for $5M After 2 years Lever #1: post money Valuation after Series A= $?? Lever #2: Raise $85,000 for 12.5% of company Budget for 2 yrs Each founder salary $12,000/yr Have $27 for Operations for 2 years What is the Company's Valuation after Series A? What will be the amount of money for operations over the 2 year period? h. Fill out the rest of the Table What will be the final percent ownership for each Founder and the Series A Investor? (put answers next to letters below) What will be the payout for each Founder and the Series A Investor? (put answers next to letters below) 2. Newco founders have raised $85,000 from a Series A investor for 12.5% of the company. The investor has agreed to pay each co-founder a salary of $12,000/year for 2 years. The co-founders and Series A investor believe that Newco can be acquired for $5,000,000 after 2 more years of operation. Complete the Cap Table below and put the correct answers for each shaded box next to the letters below. (20 points) Start Company Series A Angel Financing Payout d. a. Technical Founder Finance/Operations Founder 62.5% 37.596 b. Technical Founder Finance/Operations Founder Investors- Series A Total Equity C. f. Total Equity 100% 100% S 5,000,000 Acquired for $5M After 2 years Lever #1: post money Valuation after Series A= $?? Lever #2: Raise $85,000 for 12.5% of company Budget for 2 yrs Each founder salary $12,000/yr Have $27 for Operations for 2 years What is the Company's Valuation after Series A? What will be the amount of money for operations over the 2 year period? h. Fill out the rest of the Table What will be the final percent ownership for each Founder and the Series A Investor? (put answers next to letters below) What will be the payout for each Founder and the Series A Investor? (put answers next to letters below)