131 point\ Answer questions 13 to 15 using this information.\ 1.) Max is a private equity investor and Sam is an entrepreneur. Max pays

$3

million for 30 percent of Sam's startup company, SS Co.\ If the deal is structured as convertible preferred, and PredatoryPurchaser then offers

$5

million for the entirety of the company. Would Max convert to common and how\ much will be her payoff (net of

$3M

initial investment)\ Yes,

$600K

\ Yes,

$1.5M

\ No,

$5M

\ No,

$0

\ 141 point\ 2.) Which statement is TRUE?\ Sam is always worse off if participating added to convertible preferred.\ Max is better off adding liquidation preference of

1.5x

than participating to the convertible preferred if she believes that the valuation end up being below

$5M

.\ Max is better off adding liquidation preference of

1.5x

than participating to the convertible preferred if she believes that the valuation end up being

$9M

.\ If Sam believes that the valuation will be greater than

$7.5M

, he would prefer adding

1.5x

liquidation preference than participating to the convertible preferred.\ 151 point\ 3.) If Max wants to provide her LPs the highest protection from dilution if the next financing round will happen at a lower share price than what Max paid for SS, Max:\ Would request no antidilution protection\ Would request weighted average antidilution provision\ Would request

5x

liquidation preference\ Would request full-ratchet antidilution provision

Answer questions 13 to 15 using this information. Max is a private equity investor and Sam is an entrepreneur. Max pays $3 million for 30 percent of Sam's startup company, SS Co. If the deal is structured as convertible preferred, and PredatoryPurchaser then offers $5 million for the entirety of the company. Would Max convert to common and hon much will be her payoff (net of $3M initial investment) Yes, $600K Yes, $1.5M No, $5M No, $0 1 point Which statement is TRUE? Sam is always worse off if participating added to convertible preferred. Max is better off adding liquidation preference of 1.5x than participating to the convertible preferred if she believes that $5M. Max is better off adding liquidation preference of 1.5x than participating to the convertible preferred if she believes that the valion $9. 1 point If Max wants to provide her LPs the highest protection from dilution if the next financing round will happen at a lower share price than what Max paid for SS, Max: Would request no antidilution protection Would request weighted average antidilution provision Would request 5x liquidation preference Would request full-ratchet antidilution provision