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a. Part B: Comparing Security Types Jones proposes taking participating preferred stock with 1x liquidation preference in return for her $5 million investment. Draw the payoff diagram for this security from Jones' perspective, assuming she invests $5 million at a pre-money valuation of $14.75 million with no option pool. b. What is her cash-on-cash return (money received divided by investment) if New Venture exits in December 2020 at a $150 million valuation? c. Thompson provides a counter-proposal in which the security will be a standard convertible preferred stock with a liquidation of 2X. Draw the payoff diagram for this security from Jones' perspective. d. If New Venture exits in December 2020 at a $150 million valuation what would be Jones payoff? which type of a security would Jones prefer? Why? At what company valuation would the two securities have an equal payout? e. Techstars Offer w/ Optional Conv note of $100K Option Pool Techstars Priced Round # 10,000,000 94.00% 638, 298 6.00% Seed Round Conv Notes # % 10,000,000 89. 13% 638, 298 5. 69% 581, 453 5. 18% 77.99% Founders Techstars Seed Convertible Notes Stock Option Pool Series A VC Total 4.98% 10,000,000 638, 298 581, 453 1, 602, 822 Series A # 10,000,000 638, 298 581, 453 1,602, 822 3, 205, 643 16,028, 216 4.53% 12. 50% % 62. 39% 3. 98% 3.63% 10.00% 20.00% 100.00% 10,638, 298 100.00% 11, 219, 751 100.00% 12, 822, 573 100.00% 18,000 0.028 Techstars Investment TS share price (common) Seed Valuation Cap Seed Investment Seed Share price Seed Share price check 3,000,000 142, 500 0.215 0.245 Series A Post Money Valuation Series A Investment Series A Share Price Series A share price check 10,000,000 2,000,000 0.624 0.624 Grey cells are data that is given, everything else is calculated F M N B V option command 1 (a) postmohly valuation: 1415+5=09.75 ch) shape of company as 319.15 want (c) ne shape, w wipe-sharp ELI. / ntlow, and N= 318,983 Price per share: 5,00,000/128.983 = $14.15 (4) share of the import getting today -win/+(H15%) = 28.11% (9) N / (low, anth) = 29.117 n = 40,77 share allocated to option pool = (1, 0, not h Jxity = (low, who 1714) 715 2211,607 a. Part B: Comparing Security Types Jones proposes taking participating preferred stock with 1x liquidation preference in return for her $5 million investment. Draw the payoff diagram for this security from Jones' perspective, assuming she invests $5 million at a pre-money valuation of $14.75 million with no option pool. b. What is her cash-on-cash return (money received divided by investment) if New Venture exits in December 2020 at a $150 million valuation? c. Thompson provides a counter-proposal in which the security will be a standard convertible preferred stock with a liquidation of 2X. Draw the payoff diagram for this security from Jones' perspective. d. If New Venture exits in December 2020 at a $150 million valuation what would be Jones payoff? which type of a security would Jones prefer? Why? At what company valuation would the two securities have an equal payout? e. Techstars Offer w/ Optional Conv note of $100K Option Pool Techstars Priced Round # 10,000,000 94.00% 638, 298 6.00% Seed Round Conv Notes # % 10,000,000 89. 13% 638, 298 5. 69% 581, 453 5. 18% 77.99% Founders Techstars Seed Convertible Notes Stock Option Pool Series A VC Total 4.98% 10,000,000 638, 298 581, 453 1, 602, 822 Series A # 10,000,000 638, 298 581, 453 1,602, 822 3, 205, 643 16,028, 216 4.53% 12. 50% % 62. 39% 3. 98% 3.63% 10.00% 20.00% 100.00% 10,638, 298 100.00% 11, 219, 751 100.00% 12, 822, 573 100.00% 18,000 0.028 Techstars Investment TS share price (common) Seed Valuation Cap Seed Investment Seed Share price Seed Share price check 3,000,000 142, 500 0.215 0.245 Series A Post Money Valuation Series A Investment Series A Share Price Series A share price check 10,000,000 2,000,000 0.624 0.624 Grey cells are data that is given, everything else is calculated F M N B V option command 1 (a) postmohly valuation: 1415+5=09.75 ch) shape of company as 319.15 want (c) ne shape, w wipe-sharp ELI. / ntlow, and N= 318,983 Price per share: 5,00,000/128.983 = $14.15 (4) share of the import getting today -win/+(H15%) = 28.11% (9) N / (low, anth) = 29.117 n = 40,77 share allocated to option pool = (1, 0, not h Jxity = (low, who 1714) 715 2211,607