PART 1
a.
NI Y5
MM
EV
IRR required
0
(5,000,000.00)
5,000,000.00
Require
b.
Pre shares
Post shares
Shares acquired
c.
NI Y5
X PE
MV
IRR required
0
(12,000,000.00)
12,000,000.00
Require
e.
5000000
20
100,000,000.00
50%
1
7,500,000.00
1,000,000.00
1,612,090.68
612,090.68
16,875,000.00
Post equivalent
Post equivalent
Price/share
5000000
20
100000000
50%
1
18,000,000.00
2
27,000,000.00
3
40,500,000.00
91% of the company
1,000,000.00
11,267,605.63
10,267,605.63
Mgmt Reserve %
NI Y5
X PE
MV
IRR required
15%
5,000,000.00
20
85,000,000.00
50%
Require
11,250,000.00
38% of the company
Pre shares
Post shares
Shares acquired
0
(5,000,000.00)
5,000,000.00
Post equivalent
Post equivalent
Price/share
1
7,500,000.00
2
11,250,000.00
44.6691176% of the company
3
16,875,000.00
PART 2
a.
NI Y5
MM
EV
IRR required
0
(5,000,000.00)
5,000,000.00
Require
5,000,000.00
20
100,000,000.00
50%
95,000,000.00
1
7,500,000.00
2
11,250,000.00
3
16,875,000.00
35% of the company
b.
Pre shares
Post shares
Shares acquired
c.
Samantha's risk would decrease while reward would increase when it comes to the downside and de
The opposite holds true for John. As Samantha's proposal of participating preferred stock indiciates t
If
EV Down
EV Up
1,000,000.00
1,531,486.15
531,486.15
Post equivalent
Post equivalent
Price/share
Participating Preferred
35%
50,000,000.00 Down
20,616,776.32
200,000,000.00 Up
72,672,697.37
PART 3
a.
Mgmt Reserve %
NI Y5
X PE
MV
IRR required Y1
IRR required Y3
0
(5,000,000.00)
5,000,000.00
15%
5,000,000.00
20
78,409,000.00
50%
30%
1
7,500,000.00
2
11,250,000.00
3,000,000.00
Require
48.4239692% of the company
Pre shares
1,000,000.00
3
(3,000,000.00)
16,875,000.00
3,900,000.00
Post equivalent
b.
Post shares
Shares acquired
1,938,885.15
938,885.15
Mgmt Reserve %
NI Y5
X PE
MV
IRR required Y1
IRR required Y3
15%
5,000,000.00
20
85,000,000.00
50%
30%
0
(5,000,000.00)
5,000,000.00
Require
Pre shares
Post shares
Shares acquired
c.
Mgmt Reserve %
NI Y5
X PE
MV
IRR required Y1
IRR required Y3
0
(5,000,000.00)
5,000,000.00
Investor Y1
w/o dilution
w/o 2nd round
Post equivalent
Price/share
1
7,500,000.00
2
11,250,000.00
3,000,000.00
7.7541176% of the company
1,938,885.15
2,101,866.33
162,981.19
Post equivalent
Post equivalent
Price/share
15%
5,000,000.00
20
100,000,000.00
50%
30%
1
7,500,000.00
2
11,250,000.00
3,000,000.00
Require
37.9687500% of the company
Pre shares
Post shares
Shares acquired
1,000,000.00
1,612,090.68
612,090.68
Mgmt Reserve %
NI Y5
X PE
MV
IRR required Y1
3
(3,000,000.00)
16,875,000.00
3,900,000.00
15%
5,000,000.00
20
100,000,000.00
50%
3
(3,000,000.00)
16,875,000.00
3,900,000.00
Post equivalent
Post equivalent
Price/share
IRR required Y3
0
(5,000,000.00)
5,000,000.00
Investor Y1
w/o dilution
Require
Pre shares
Post shares
Shares acquired
30%
1
7,500,000.00
2
11,250,000.00
3,000,000.00
3
(3,000,000.00)
16,875,000.00
3,900,000.00
6.5910000% of the company
1,612,090.68
1,725,840.85
113,750.17
Post equivalent
Post equivalent
Price/share
4
25,312,500.00
5
37,968,750.00
37,968,750.00
62%
100%
8.16872428
4
60,750,000.00
25,312,500.00
38%
Remainder
91%
5
91,125,000.00
91,125,000.00
9%
100%
1.17
Remainder
5
37,968,750.00
37,968,750.00
4
25,312,500.00
5 5 after 5m return
37,968,750.00 32,968,750.00
37,968,750.00
65%
100%
9.407582938
Remainder
35%
rease when it comes to the downside and decrease when it comes to the upside in comparison to common stock in Part 1.
al of participating preferred stock indiciates that she feels the need for protection in case of downside, John might regard it as insufficient
Common
Down
Up
4
25,312,500.00
5,070,000.00
52%
38%
18,984,375.00
75,937,500.00
5
37,968,750.00
37,968,750.00
6,591,000.00
Remainder
48%
100%
5.325465021
4
25,312,500.00
5,070,000.00
5
37,968,750.00
37,968,750.00
6,591,000.00
92%
100%
18.40703232
4
25,312,500.00
5,070,000.00
62%
100%
8.16872428
Remainder
5
37,968,750.00
37,968,750.00
6,591,000.00
Remainder
8%
4
25,312,500.00
5,070,000.00
93%
100%
26.37358685
5
37,968,750.00
37,968,750.00
6,591,000.00
Remainder
rison to common stock in Part 1.
of downside, John might regard it as insufficient trust in his company and its projections.
1 Initial shares
New shares A
Price/share A
Pre-money B
Post-money B
Pre-money shares
Price/share pre-B
Series B
Post-money shares
Price/share B
New shares B
15,000,000.00
10,000,000.00
1.00
15,000,000.00
20,000,000.00
25,000,000.00
0.60
5,000,000.00
33,333,333.33
0.60
8,333,333.33
2 Shares if same price/share
Price/share B
Total shares A
New shares A
Total shares I
New shares I
Conversion Rate
30,000,000.00
0.90
11,111,111.11
1,111,111.11
16,666,666.67
1,666,666.67
1.11
3 Total shares A+I
New shares A+I
Conversion Rate
41,666,666.67
16,666,666.67
1.67
VC Val
Shares
Price/share
4,000,000.00
5,000,000.00
0.80
Entrepreneur
Shares
Price/share
5,000,000.00
5,000,000.00
1
