Suppose that the VC holds convertible preferred with 2X liquidation rights. The VC invested $3m and if they convert, they would own 33.3% of the equity. Suppose the company the VC invested is sold for $15m. How much would the VC get in the sale? Would the VC want to convert their shares?

Answer rating: 100% (QA)

In this scenario the VC would indeed want to convert their shares before the liquidation event sale ... View the full answer