Assume in a VC financing, the pre-money valuation is $12 million and the amount invested by the VC investors is $8 million. The principal plus accrued interest on outstanding promissory notes are $2 million, and the discounted rate for conversion of notes is 20%. The shares outstanding on a fully diluted basis prior to the investment is 2 million shares.

If the founders and investors agree to use post-money method to account for the conversion of the convertible note, the ownership of the new investors is?

Answer rating: 100% (QA)

To calculate the ownership of the new investors using the postmoney method we need to determine the ... View the full answer