1. Square, Inc. raised its first round of venture capital by issuing 10 million shares of...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
1. Square, Inc. raised its first round of venture capital by issuing 10 million shares of Series A preferred stock for $1 per share, which is convertible into common stock on a 1-1 basis and has a non-participating 1x non-participating liquidation preference. Before the Series A offering, there were 30 million shares of common stock outstanding. One year later, Square needs to raise more capital, so they now plan to issue 5 million shares of Series B preferred stock, which is convertible into common 1-1 and has a non-participating 1x non-participating liquidation preference and a weighted-average ratchet. After meeting with several VC firms in the Valley, they agree on a price of $10 per share. They now have 35 million shares of common stock. [A] Complete the Series B cap table below by filling in the shaded area: Common Series B Round Shares Issued (millions) Price After Conversion Percentage of Common Series A convertible preferred Series B convertible preferred Common shares Total shares [B] Determine the pre- and post-money valuation for Series B round. [C] Based on the information above, explain whether Square could currently be considered a "Unicorn"? [D] If Square is acquired 1-year later for $200 million, what is the value of each shareholder's (A, B, and 1. Square, Inc. raised its first round of venture capital by issuing 10 million shares of Series A preferred stock for $1 per share, which is convertible into common stock on a 1-1 basis and has a non-participating 1x non-participating liquidation preference. Before the Series A offering, there were 30 million shares of common stock outstanding. One year later, Square needs to raise more capital, so they now plan to issue 5 million shares of Series B preferred stock, which is convertible into common 1-1 and has a non-participating 1x non-participating liquidation preference and a weighted-average ratchet. After meeting with several VC firms in the Valley, they agree on a price of $10 per share. They now have 35 million shares of common stock. [A] Complete the Series B cap table below by filling in the shaded area: Common Series B Round Shares Issued (millions) Price After Conversion Percentage of Common Series A convertible preferred Series B convertible preferred Common shares Total shares [B] Determine the pre- and post-money valuation for Series B round. [C] Based on the information above, explain whether Square could currently be considered a "Unicorn"? [D] If Square is acquired 1-year later for $200 million, what is the value of each shareholder's (A, B, and
Expert Answer:
Related Book For
Intermediate Accounting Volume 2
ISBN: 9781119497042
12th Canadian Edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Irene M. Wiecek, Bruce J. McConomy
Posted Date:
Students also viewed these finance questions
-
Square raised their first round of venture capital by issuing Series A preferred stock, which is convertible into common stock on a 1-1 basis and has a non-participating 1x conventional liquidation...
-
Managing Scope Changes Case Study Scope changes on a project can occur regardless of how well the project is planned or executed. Scope changes can be the result of something that was omitted during...
-
Figure 11-31 shows a cooling curve for a Pb-Sn alloy. Determine (a) The pouring temperature; (b) The superheat; (c) The liquidus temperature; (d) The eutectic temperature; (e) The freezing range; (f)...
-
In a ternary amplitude shift keying (ASK) communications system, there are three equally likely transmitted signals {s0, s1, s2}. These signals are distinguished by their amplitudes such that if...
-
What is the difference between a line graph and a time plot?
-
Identify the research scenario, including the general area of focus. Develop a hypothetical research scenario that would necessitate the use of the Mixed Method A-B-A Design. The research will be...
-
In August of 2009 the capital structure of the Emerson Electric Corporation (EMR) (measured in book and market values) appeared as follows: What weights should Emerson use when computing the firms...
-
A summary of two stocks is shown. 52W high 52W low Name of Stock Symbol High Low Close 37.18 29.39 Zycodec ZYO 11.76 7.89 Unix Co UNX 39.06 32.73 34.95 16.12 12.11 15.78 Last year, a stockholder...
-
The following cross tabulation shows the average speed of the 25 winners by year of the Daytona 500 automobile race (The 2013 World Almanac). a. Calculate the row percentages. b. W hat is the...
-
What mass of 25.0% Ca(NO:)2 solution contains 60.0 grams of water? O a. 25.0 g O b. 80.0 g O.60.0 g O d. 85.7 g
-
Australian citizens aged 60 or over who are not working more than 20 hours per week are eligible for a free Seniors Card. Issued by individual state governments, the card provides government...
-
Erik is under contract with a textbook publisher to provide interesting and current examples to reinforce key theoretical concepts. He makes \( 50\) per hour for doing this work. Erik also wants to...
-
The European Youth Card offers discounts on culture, travel, accommodation, shopping, and services in most European countries. Anyone under the age of 30 or 26 , depending on the country, can...
-
Goods often sell for different prices in different countries. Suppose the inverse demand curves in two countries are \(p_{1}=40-3 Q_{1}\) and \(p_{2}=90-2 Q_{2}\), and a monopoly produces at constant...
-
In a nuts snack packet, it is mentioned that the content is \(32 \%\) cashews and \(68 \%\) peanuts. A researcher is trying to find out if the actual content of the packet has changed from what is...
-
Predict the outcomes of the two sets of experiments to be carried out with the 11 halides used in this chapter. Group 1: 1-bromobutane, 2-bromobutane, 2-bromo-2-methylpropane, and bromobenzene Group...
-
Portal Manufacturing has total fixed costs of $520,000. A unit of product sells for $15 and variable costs per unit are $11. a). Prepare a contribution margin income statement showing predicted net...
-
Matta Leasing Limited, which has a fiscal year end of October 31 and follows IFRS 16, signs an agreement on January 1, 2020, to lease equipment to Irvine Limited. The following information relates to...
-
Refer to the data for Duster Corporation's defined benefit pension plan in BE19.9. Now assume that the company follows ASPE instead of IFRS. Determine the 2020 effect of the pension plan on pension...
-
LEW Jewellery Corp. uses gold in the manufacture of its products. LEW anticipates that it will need to purchase 500 ounces of gold in October 2020 for jewellery that will be shipped for the holiday...
-
Some stream data have been collected from a process plant, and these are listed in Table P19.2. Assuming the minimum temperature difference between streams, \(\Delta T_{\min }=10^{\circ} \mathrm{C}\)...
-
Figure P19.3 shows a network design using steam, cooling water and some heat recovery. (a) Does this design achieve the minimum energy target for \(\Delta T_{\min }=20^{\circ} \mathrm{C}\) ? (b) If...
-
Figure P19.4 shows two hot streams and two cold streams for heat integration (subject to \(\Delta T_{\min }=20^{\circ} \mathrm{C}\) ). (i) What are the energy targets? (ii) Show a network design...
Study smarter with the SolutionInn App