Reference no: EM133033456

Questions -

Q1. A new company launches with a $3m Series-A at an $8m pre-$ valuation, at the same time creating a 25% stock Pool. A year later the company raises a $15m Series-B at a $48m pre-$ valuation. Two years after that the company does its Series-C, $60m on $200m.

a. Create the company's Cap Table through the Series C.

b. Suppose the company gave employees recruited between the A- and B-rounds 11.6% of the company, and employees recruited between the B- and C-rounds 7.1% of the company. How big is the Pool after the C-round?

Q2. A start-up raises $10m in a Series A at a $15m pre-$ valuation. The company sells for $30m.

a. How much will common shareholders receive if the VC has a basic liquidation preference?

b. How much will common shareholders receive if the VC has a 2x liquidation preference?

c. How much will common shareholders receive if the VC has a participating liquidation preference?

Q3. You join a start-up as the first employee, receiving 96,000 shares that vest quarterly over four years with a one-year cliff. How much of your stock has vested after:

a. 6 months?

b. 12 months?

c. 24 months?

d. 48 months?

Q4. Given that 1) unvested shares and 2) shares that remain in the Pool are cancelled in an exit, if 20% of a firm's shares end up being cancelled, what happens to the ownership of the remaining shareholders?