The startup High-Growth Venture had a Series A in which it sold 10 million shares  of convertible preferred stock at $1.00 per share. Prior to Series A financing,  Management owned 15 million shares of common stock and the conversion price  of preferred stock to common stock was 1:1.

 High-Growth Venture now needs to raise an additional $5 million in Series B  round and learns that the investors insist on a pre-money valuation of $15 million.

Create the fully-diluted capitalization tables subsequent to  the Series B investment under the two following scenarios:

 a. There is full ratchet protection (i.e. series A investors are issued new shares  for free such that their effective price equals the share price paid by the new  investors.

 b. There is a Weighted Average Dilution Protection.

Answer rating: 100% (QA)

a Full Ratchet Protection Given information Series A financing 10 million shares of convertible preferred stock at 100 per share Management owned 15 m... View the full answer