The seed investors are considering a $750,000 investment in the form of a convertible, which will convert
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The seed investors are considering a $750,000 investment in the form of a convertible, which will convert at the lower of (1) 80% of the price per share in the next equity financing or (2) a pre-money valuation of $5 million at the seed round of investment ❑The next equity financing is defined as a round of financing where at least $2 million is raised, including the conversion of the $750,000 convertible notes. ❑Assume there are 900,000 founder shares and a 10% issued and unallocated option pool of 100,000 shares
Series A investor takes 20% for a $4 million
Question: How will the ownership structure look like if there is no valuation cap?
Related Book For
Financial Management for Decision Makers
ISBN: 978-0138011604
2nd Canadian edition
Authors: Peter Atrill, Paul Hurley
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