Note $1$: Assume that Telco raises $$5$ million at a pre$-$money valuation of $$10$ million. Suppose that Valhalla invests $$2\mathrm{.}5$ million of the total $$5$ million raised by Telco $($the remaining $$2\mathrm{.}5$ million are invested by Columbia Capital$).$

Note $2$: Assume that Telco raises an additional $$5$ million, and that Valhalla contributes its pro$-$rata share of these $$5$ million. Note that this is consistent with the description in case Exhibit $1($page $8).$

Valhalla ownership $\%$: Valhalla ownership $\%$:Begin with the $$5mm$ pre$-$money tab.

First, calculate the Valhalla ownership $\%($cell B$33).$ To do that, you'll need to calculate

Telco's post$-$money valuation, and then simply divide Valhalla's investment amount by

the post$-$money valuation.

Next, calculate, Valhalla's proceeds if Telco is sold for $$169\mathrm{.}4$ million, which is Telco's

assumed exit valuation under the Company's Model if Telco is valued at $2$ x revenues $($see

case page $17).$ Write down the exit proceeds in cell G$9.$

Note that, as described in the case $($page $8),$ we are assuming that in all scenarios,

Valhalla makes an investment contribution in Telco's Series B round equal to its

pro$-$rata share. For example, this means that if Valhalla owns $20\%$ of Telco after

the Series A and the Series B round is for $$10$ million, Valhalla will invest $0\mathrm{.}210$

$=$$$2$ million in the Series B round, thus ensuring that Valhalla continues to own

$20\%$ of Telco after the Series B$,$ and so that Valhalla will receive $20\%$ of Telco's

exit valuation. $($The numbers in this example are made$-$up $-$ when solving the

exercise, you should use the numbers in the Excel file.$)$

Finally, calculate the IRR earned by Valhalla if Telco is sold for $$169\mathrm{.}4$ million. Write

down the IRR in cell M$9.$

In order to calculate the IRR's, the Excel function XIRR$()$ will be helpful.

The remaining calculations are all analogous. For instance, in cell G$10$ you write down

Valhalla's proceeds if Telco is sold for $$115\mathrm{.}0$ million, and in cell M$10$ the corresponding

IRR. Similarly, in cell K$9$ you write down Valhalla's proceeds if Telco is sold for $$226\mathrm{.}2$

million, and in cell N$9$ the corresponding IRR.

Once done with this tab, you move on to the $$10mm$ pre$-$money tab. Here everything is

analogous: You begin by calculating Valhalla's ownership $\%($cell B$33),$ and then you do

the rest.

The only additional step is that you'll need to calculate Valhalla's investment in the

Series B round, which you need to write $($with a negative sign$)$ in cells F$8,$ F$9,$ F$17,$ F$18,$

$F25,F26,$ J$8,$ J$9,$ J$17,$ J$18,$ J$25,$ and J$26($it is the same number in all $12$ cells$).$ To make

this calculation, recall that Valhalla makes an investment contribution in Telco's Series B

round equal to its pro$-$rata share; that is$,$ Valhalla will invest $x\%$ of the $$5$ million raised

in the Series B$,$ where X equals the Valhalla ownership $\%$ you have calculated in cell

B$33.$