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
Mr. M enters into a contract with Mr. R under which R agrees to build a model railroad for $200. The value of the model railroad to M is $300. Expecting that the model railroad wil

What are some of the changes taking place in the international business environment? How do changes in the international business environment affect pricing, output, cost and profi

Yanni works for Woolworths Limited (WOW) and owns 5,000 Woolworths shares that he received in lieu of a bonus five years ago. Woolworths has reported an NPAT of $1.294 billion and

Why is AIDs a major economic problem? AIDs are a tragedy which is affecting the structure and size of population. There AIDs is widespread in between the economically active th

Assume Mr. Robinson deposits pounds 600 in currency at a bank. Later that day Ms. Volker borrows pounds 1200 from the similar bank. The money supply will have enhanced by pounds 60

What is an alternative process strategy to the assembly line that Wheeled Coach currently uses?

Situation: Only a few astute operatives say the crash in real estate prices as the USA entered the summer of 2007.  You were one of the few that appreciated that real estate price

how starting assignment on this topic

QUESTION 1 (a) In what specific ways does Becker's model of the allocation of time differ from the simple work-leisure choice model? (b) Compare and contrast the functioning