Use the above capitalization table for Startup Inc. (Startup) and assume that . Founders (Natalie & Matt) purchased their shares of common stock for $0.001 per share (for a total of $3,500). Aventure capital fund managed by Tim and Hadley of CMU Ventures ("CMUV) recently paid $1.00 for each share of its Series A preferred stock (for a total of $5,000,000). Immediately after the Series A financing, CMUV has the right to convert each share of its Series A preferred stock into one share of common stock The Series A preferred stock has full ratchet price-based anti-dilution protection The Series A preferred stock has a ONE times liquidation preference right (.e. LP - 1X) AND the Series A preferred stock is full participating The above capitalization table is accurate and complete(le, immediately after the Series A financing: (a) there are no other outstanding shares of stock or options to purchase stock and (b) Startup has not yet issued any shares reserved for its Stock Option Plan). Further, assume that: (a) a large Delaware corporation, Big Public Co is going to buy all of Startup's assets for $20,000,000; (b) immediately after the sale, no shares of Startup's common stock will be subject to any vesting (o immediately after the sale, Startup has no debts or other Habilities, and, a) Startup is going to distribute all of the sale proceeds to its stockholders. How much will CMUV receive from the distribution of the sales proceeds as a result of its liquidation preference and participation right? Liquidation preference - $5,000,000; Participation right ** $7,500,000 Liquidation preference - 37,500,000; Participation right - $5,000,000 Liquidation preference - $10,000,000; Participation right 510,000,000 Liquidation preference $5,000,000; Participation right * $5,000,000 Use the above capitalization table for Startup Inc. (Startup) and assume that . Founders (Natalie & Matt) purchased their shares of common stock for $0.001 per share (for a total of $3,500). Aventure capital fund managed by Tim and Hadley of CMU Ventures ("CMUV) recently paid $1.00 for each share of its Series A preferred stock (for a total of $5,000,000). Immediately after the Series A financing, CMUV has the right to convert each share of its Series A preferred stock into one share of common stock The Series A preferred stock has full ratchet price-based anti-dilution protection The Series A preferred stock has a ONE times liquidation preference right (.e. LP - 1X) AND the Series A preferred stock is full participating The above capitalization table is accurate and complete(le, immediately after the Series A financing: (a) there are no other outstanding shares of stock or options to purchase stock and (b) Startup has not yet issued any shares reserved for its Stock Option Plan). Further, assume that: (a) a large Delaware corporation, Big Public Co is going to buy all of Startup's assets for $20,000,000; (b) immediately after the sale, no shares of Startup's common stock will be subject to any vesting (o immediately after the sale, Startup has no debts or other Habilities, and, a) Startup is going to distribute all of the sale proceeds to its stockholders. How much will CMUV receive from the distribution of the sales proceeds as a result of its liquidation preference and participation right? Liquidation preference - $5,000,000; Participation right ** $7,500,000 Liquidation preference - 37,500,000; Participation right - $5,000,000 Liquidation preference - $10,000,000; Participation right 510,000,000 Liquidation preference $5,000,000; Participation right * $5,000,000
