A.Why would an investor even fund a company that would accept a 5x liquidation preference?

B.SpecialStuff needs another $3 million. Acme, happy with its returns on Sam's first company, eagerly agrees to participate, investing $4 million for 20 percent of the company. Assume that Sam and Max each own convertible preferred stock.

a.How much do Max and Sam now own?

b.Create payout tables for exit values at $4 million, $8 million, $12 million, and $20 million for each participant assuming pooled seniority.

c.Conduct the same analysis as in b but now with Acme senior to Max and Sam.