Question: Consider the following VC Method Case Founder has 1 , 0 0 0 , 0 0 0 shares of firm. Founder expects to raise two

Consider the following VC Method Case
Founder has 1,000,000 shares of firm.
Founder expects to raise two rounds of financing before an exit in 5 years. Exit valuation (TV) at that time is estimated as $100,000,000.
Series A funding (today) reguires 2M in additional funding, 5 years before exit. Series B funding (after 2 years) reguires 5M in additional funding, 3 years before exit.
To account for the various risks, use 50% discount rate for the first 2 years, and 30% for the last three years.
(a) What is the ownership % to Series A investors after that found. Enter answer as a % to 2 decimal places [1]
(b) How many new shares were will be issued to Series A investors after that found. Enter to nearest number of shares. Do not round intermediate results. [2]
(c) What is the ownership % to Series B investors after that found. Enter answer as a % to 2 decimal places [3]
(d) How many new shares were will be issued to Series B investors after that found. Enter to nearest number of shares. Do not round intermediate results. [4]
(e) What s the compounded annual rate of return series A investors will receive if all projections are realized. Enter answer as a % to 2 decimal places. Do not round intermediate results [5]

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