DIY Chef (Post Series A Capitalization Table)
	Shares		%
Common Stock:
Founders: Sierra & Derrick	4,000,000		40%
Reserved for Stock Option Plan	2,000,000		20%
Series A Preferred Stock:
CMU Ventures II, LP	4,000,000		40%
Total Capital Stock	10,000,000		100%

Use the above capitalization table for DIY Chef and assume that:

• Founders (Sierra & Darrick) purchased their shares of common stock for $0.001 per share (for a total of $4,000).
• A venture capital fund managed by Carson and Shanell of CMU Ventures (CMUV) recently paid $2.00 for each share of its Series A preferred stock (for a total of $8,000,000).
• Immediately after the Series A financing, CMUV has the right to convert each share of its Series A preferred stock into one share of common stock.
• The Series A preferred stock has full ratchet price-based anti-dilution protection.
• The Series A preferred stock has a ONE times liquidation preference right (i.e., LP = 1X) AND the Series A preferred stock is full participating.
• The above capitalization table is accurate and complete (i.e., immediately after the Series A financing: (a) there are no other outstanding shares of stock or options to purchase stock; and (b) DIY Chef has not yet issued any shares reserved for its Stock Option Plan)

QUESTION 19

1. Again, for this question, assume that: (a) a large Delaware corporation, Big Public Co., is going to buy all of DIY Chef's assets for $28,000,000; (b) immediately after the sale, no shares of DIY Chef's common stock will be subject to any vesting; (c) none of the stock option reserves were issued or exercised; (d) immediately after the sale, DIY Chef has no debts or other liabilities; and, (e) DIY Chef is going to distribute all of the sale proceeds to its stockholders.

   How much will CMUV receive from the distribution of the sales proceeds as a result of its participation right?

   		$4,000,000
   		$8,000,000
   		$10,000,000
   		$14,000,000

1 points

QUESTION 20

1. Again, for this question, assume that: (a) a large Delaware corporation, Big Public Co., is going to buy all of DIY Chef's assets for $28,000,000; (b) immediately after the sale, no shares of DIY Chef's common stock will be subject to any vesting; (c) immediately after the sale, DIY Chef has no debts or other liabilities; and, (d) DIY Chef is going to distribute all of the sale proceeds to its stockholders.

   How much will CMUV receive, in total, from the distribution of the sales proceeds?

   		$4,000,000
   		$8,000,000
   		$10,000,000
   		$18,000,000

1 points

QUESTION 21

1. Again, for this question, assume that: (a) a large Delaware corporation, Big Public Co., is going to buy all of DIY Chef's assets for $28,000,000; (b) immediately after the sale, no shares of DIY Chef's common stock will be subject to any vesting; (c) immediately after the sale, DIY Chef has no debts or other liabilities; and, (d) DIY Chef is going to distribute all of the sale proceeds to its stockholders.

   As a result of the preferred stock liqudation preferece and participation rights, in total, what % of the sales proceeds did CMUV receive from the distribution?

   		more than 50%
   		40%
   		50%
   		100%