calculate the following: (i) The price per share of the Series A financing. (ii) The postmoney valuation
Question:
calculate the following:(i) The price per share of the Series A financing.(ii) The postmoney valuation of the Series A financing.(iii) The premoney valuation of the Series A financing.(iv) The postmoney valuation of the Series B financing.(v) The percentage ownership you will acquire in the Series B financing.(vi) The percentage ownership that will be retained by the combination of the founders, the current management, and the Series A investor.(vii) The number of additional shares that should be issued to management.(viii) The number of shares that you should purchase in the Series B financing.(ix) The price per share of the Series B financing.
Founders – 950,000 common sharesCurrent Management – 300,000 common sharesSeries A Investor – 750,000 Series A preferred sharesTotal shares – 2,000,000 fully diluted sharesThe Series A investor provided $1 million of financing. Current management was hired in connection with the Series A financing; assume their shares were issued immediately prior to the closing of Series A.Your venture fund plan to provide a $3 million Series B financing and have settled upon a $7 million pre-money valuation. Immediately prior to the Series B financing (in other words, at the sole expense of the other pre-existing shareholders), you want to issue new shares to increase current management’s ownership such that it will constitute 18% of the post-Series B capitalization.
Accounting What the Numbers Mean
ISBN: 978-0073527062
9th Edition
Authors: David H. Marshall, Wayne W. McManus, Daniel F. Viele,