$3.3.$ Neo Ventures is considering a $$10$M seed investment in Matrix. The founders and

employees of Matrix have claims on $20$M shares of common $($including the stock

pool$).$ Neo is considering three different structures for its investment:

Structure I: $10$M shares of common stock

Structure II: Redeemable Preferred $+10$M shares of common.

Structure III: Participating Convertible Preferred with participation as if $10$M shares

of common, with liquidation return capped at three times OPP. This structure

includes a mandatory conversion if there is a QPO.

To solve this problem, assume that any exit above $$7$ per share will qualify as a QPO

$($i$.$e$.,$ acquisitions for at least $$7$ per common share would also be considered

QPOs$).$

Compare the three structures for exit proceeds of $$10$M$,$ $$50$M$,$ $$130$M$,$ and $$200$M$.$