Question: These are the cap tables for a startup AFTER two rounds of financing (After Series A and Series B) by a single VC investor: Series

These are the cap tables for a startup AFTER two rounds of financing (After Series A and Series B) by a single VC investor:

Series A January 2014

Series B January 2016

shares

%

value

shares

%

value

Founder

6,300,000

63%

$6,300,000

6,300,000

52.5%

$25,200,000

Investor

3,000,000

30%

$3,000,000

5,000,000

41.7%

$20,000,000

Options

700,000

7%

$700,000

700,000

5.8%

$2,800,000

Total

10,000,000

100%

$10,000,000

12,000,000

100%

$48,000,000

EXIT: By June 2018, the company shows a net annual profit of $40M and is acquired for a multiple of 6 times profit. Employees have a 4 year linear vesting schedule with options vesting on an annual basis (shares vest once a year at the employee's employment anniversary date).

Based on this cap table, how much profit would an employee who had 4000 option shares granted to them at the time the Series A Round closes make after the exit described above (before taxes)? The strike price is equal to the Series A share price. Round up or down to the nearest dollar.

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