Startup Inc. (Post Series A Capitalization Table) Shares % Common Stock: Founders: Natalie & Matt 5,000,000 50% Series A Preferred Stock: CMU Ventures III, LP 5,000,000 50% Total Capital Stock 10,000,000 100% Use the above capitalization table for Startup Inc. (Startup) and assume that: Founders (Natalie & Matt) purchased their shares of common stock for $0.001 per share (for a total of $3,500). A venture capital fund managed by Tim and Hadley of CMU Ventures (CMUV) recently paid $1.00 for each share of its Series A preferred stock (for a total of $5,000,000). 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) Startup has not yet issued any shares reserved for its Stock Option Plan). Further, assume that: (a) a large Delaware corporation, Big Public Co., is going to buy all of Startup's assets for $20,000,000; (b) immediately after the sale, no shares of Startup's common stock will be subject to any vesting; (c) immediately after the sale, Startup has no debts or other liabilities; and, (d) Startup 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 liquidation preference and participation right?