Question 5. (25 points total] A three-year old Chicago-based startup has 20 million common shares, all of which are owned by the founder. The founder is considering the following two offers: Offer A: A VC firm is offering a $10 million investment. In exchange, the VC will receive 10 million convertible preferred shares (non-participating) with a 1x liquidation preference. Offer B: A competitor is offering to buy the startup for $20 million in cash today. . If she takes Offer A, the founder believes that there is a 10% chance that she will be able to take the startup public via an IPO at a $300 million valuation in 5 years, and a 90% chance that she will sell the startup for $11 million also in 5 years. The founder believes that she will not need to raise any additional capital during these 5 years. a) Which offer values the startup more highly today: Offer A or Offer B? [10 points] b) Which offer should the founder accept if she is only concerned about maximizing her financial return? Why? [15 points]