uestion 1 A seed investor has purchased $2 50'000 worth of seed convertible bonds with a valuation cap of 3 million and a discount factor of 0.8. There are currently 2 million shares of common stock outstanding, all of which are held by the founders. 6 months later, the firm conducts a Series A nancing round, in which it sells 1 million shares of Series A preferred stock at a price of $3, implying a pre-money valuation of $6 million. Based on this information, what will be the ownership structure of the company after the Series A nancing round? uestion 2 An entrepreneurial friend of yours has just received the term sheet from a VG. He asks you for help as he does not fully understand many of the terms. In particular, he shows you the following excerpt from the term sheet: Securities: 5,000,000 shares of Series A Convertible Preferred Stock {henceforth Series A Preferred). Price Per Share: $1.00 per share (the "Original Purchase Price"). Current Outstanding: 15,000,000 shares of Common Stock. Pre-Money Valuation: The Original Purchase Price is based upon a fully-diluted premoney valuation of $15,000,000 and a fully-diluted post-money valuation of $20,000,000. Liquidation Preference: In the event of any liquidation, dissolution or winding up of the Company, the proceeds shall be paid as follows: First pay 1.5 times the Original Purchase Price on each share of Series A Preferred. The balance of any proceeds shall be distributed pro rata to holders of Common Stock. Optional Conversion: The Series A Preferred converts 1:1 to