Benchmark Capital proposes to invest $20 million in RL Industries for 8 million shares of Series A
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Question:
Benchmark Capital proposes to invest $20 million in RL Industries for 8 million shares of Series A Preferred Stock. The founders, Ralph Lauren and his wife, Laura Lauren are currently the only shareholders. Ralph and Lauren each own 5 million shares of RL common stock. Benchmark insists that the company issue an Employee Option Pool equivalent to 15% ownership, post-money.
(a) What is the post-money valuation?
(b) What is the pre-money valuation?
(c) Construct a pre-money and post-money Capitalization Table for RL Industries for this transaction.
| Pre-Money | Post-Money | ||||
| Shares | $ | % | Shares | $ | % |
Founders - Common | | | | | | |
Employee Options | | | | | | |
Series A Preferred | | | | | | |
Total | | | |
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