Question: Question 2: Comparing Securities Jones proposes taking participating preferred stock with 1X liquidation preference in return for her $5 million investment. a. Assuming she

Question 2: Comparing Securities Jones proposes taking participating preferred stock with 1X

Question 2: Comparing Securities Jones proposes taking participating preferred stock with 1X liquidation preference in return for her $5 million investment. a. Assuming she invests $5 million at the valuation calculated in Question 1(d), how much money will she get with this security if NewVenture exits in December 2020 at a $150 million valuation? b. Why might Thompson feel this is unfair? c. What is a reasonable counter-proposal for Thompson to offer Jones? Hint: What share of the company does Samantha Jones actually require if she is given participating preferred stock and her required rate of return is still 50% per annum? d. If Jones accepts Thompson's proposal, what is the implied pre-and post-money valuation?

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