Suppose that EBV is considering a $10M Series A investment in Newco. EBV proposes to structure the
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Suppose that EBV is considering a $10M Series A investment in Newco. EBV proposes to structure the investment as 6M shares of convertible preferred stock (CP) plus RP with $4M APP. The employees of Newco have claims on 10M shares of common stock. Following the Series A investment, Newco will have 10M common shares outstanding and would have 16M shares outstanding on conversion of the CP.
(a) After this round, what are the pre- and post-money valuations for Newco?
(b) Find IVpost and IVpre.
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Venture capital and the finance of innovation
ISBN: 978-0470454701
2nd Edition
Authors: Andrew Metrick
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