4. [Multiple Financing Rounds] Ratchets.com anticipates that it will need $15 million in venture capital to achieve a terminal value of $300 million in five years. C. D. E. A. Assuming it is a seed-stage firm with no existing investors, what annualized return is embedded in its anticipation? B. Suppose the founder wants to have a venture investor inject $15 million in three rounds of $5 million at times 0, 1, and 2 with a time 5 exit value of $300 million. If the founder anticipates returns of 70 percent, 50 percent, and 30 percent for rounds 1, 2, and 3, respectively, what percentage of ownership is sold during the first round? During the second round? During the third round? What is the founder's Year 5 own- ership percentage? Assuming the founder will have 10,000 shares, how many shares will be issued in rounds 1, 2, and 3 (at times 0, 1, and 2)? 1849 What is the second-round share price derived from the answers in Parts B and C? How does the answer to Part D change if 10 percent of total equity in Year 5 is set aside for incentive compensation? How many total shares are outstanding (including incentive shares) by Year 5? to hace its required return (used in dis