What is the value of the security

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Reference no: EM133430541

Question: VCs have invested $5M in a Series A financing round for 5M shares, and the total number of shares is 15M after series A investments.

Term sheet specifies the security structure as PCPC with following conditions.
PCPC: [Alternative 3 (cap on Preferred Stock participation rights): First pay one times the Original Purchase Price on each share of Series A Preferred. Thereafter, Series A Preferred participates with Common Stock pro rata on an as-converted basis until the holders of Series A Preferred receive an aggregate of four times the Original Purchase Price.
If exit value W = $ 72, what is the value of the security?

Reference no: EM133430541

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