SLE Ventures is making an $8M Series A investment in MemChu TechCo. The founders and employees...

 

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SLE Ventures is making an $8M Series A investment in MemChu TechCo. The founders and employees of MemChu (together called the "founders") have claims on a total of 12M shares of common stock (as exercised). a) SLE is deciding among the following six deal structures for this transaction: I. 8M shares of Convertible Preferred II. 8M shares of common III. Redeemable Preferred ($8M APP) + 8M shares of common Draw an exit diagram for each structure. Mark any key x-axis and y-axis values, and any key slope angles on the diagrams. Please show your calculations. b) For Structure I and III, what is the $W on the x-axis of the exit diagram such that SLE earns a deal-level gross value multiple (GVM) of 2 on the investment? Show your steps. SLE Ventures is making an $8M Series A investment in MemChu TechCo. The founders and employees of MemChu (together called the "founders") have claims on a total of 12M shares of common stock (as exercised). a) SLE is deciding among the following six deal structures for this transaction: I. 8M shares of Convertible Preferred II. 8M shares of common III. Redeemable Preferred ($8M APP) + 8M shares of common Draw an exit diagram for each structure. Mark any key x-axis and y-axis values, and any key slope angles on the diagrams. Please show your calculations. b) For Structure I and III, what is the $W on the x-axis of the exit diagram such that SLE earns a deal-level gross value multiple (GVM) of 2 on the investment? Show your steps.

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a I Convertible Preferred Exit diagram for Structure I Xaxis Valuation of the company in Yaxis Number of shares of common stock held by SLE Ventures in million Key slope angle Slope of the conversion ... View the full answer