Compute the lp valuation, Business Economics

Consider another company, Lateco, which has just received its fifth round of investment.  These rounds have been:

Series A: CP ($5M FV) or converts to 5M shares of common.

Series B: CP ($10M FV with 2X liquidation preference) or converts to 5M shares of common.

Series C: RP+CS ($15M FV) with 5M shares of common.

Series D: CP ($30M FV) or converts to 5M shares of common.

Series E: RP+CS ($15M FV) with 5M shares of common.

The FV of each series is equal to the dollars invested in that Series. You can assume that all VC investors have a lifetime fee percentage of 25% and carried interest of 20%, and that, in the event of an exit or liquidation, the Series E investors are redeemed first, followed by Series D, then Series C, Series B, Series A.

In addition to the VC investors, the founders of Lateco also have 5M shares of common. 
 
a)  Find the formula for the partial valuation of these founder shares following the Series E investment. Show all your work, including expiration diagrams and any necessary calculations of conversion conditions and carried-interest cutoffs.

b)  Compute the LP valuation for the series A investors.

Posted Date: 4/3/2013 1:32:49 AM | Location : United States







Related Discussions:- Compute the lp valuation, Assignment Help, Ask Question on Compute the lp valuation, Get Answer, Expert's Help, Compute the lp valuation Discussions

Write discussion on Compute the lp valuation
Your posts are moderated
Related Questions
If the Government decreases the interest rates on capital goods such as new plant and equipment and building. Investment also include spending on working capital such as stocks of


Usage of Game Theory in Managerial decision

This is concerned with any one of the following forms. controlling the supply of money controlling interest rates Rationing the amount of credit granted by banks

(present value) Suppose an entrepreneur considers to invest in a project. It needs a cash investment $I at year t = 0. If she/he invests, the project will generate an annual cash


how managerial economics is applied in a firm?

1.Classify each of the following as related to the transactions demand, precautionary demand, or asset (speculative) demand for money. Explain: (a) Rodrigo keeps $200 in cash in

(a) Show the importance of Non Profit Organisations in Small Island Economies. (b) Show the importance of Foreign Direct Investment in Small Island Economies. Comment on th

QUESTION (a) Explain what factors might determine the level of investment in an economy. (b) ‘If investment increases it will cause an increase in income. If income increase