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
Create the scatter graph of the monthly return on your corporation (on the vertical axis) versus the monthly return on the S&P 500 (on the horizontal axis)--so there should be 60 d

Define the difference between configuration management and change control and the relationship among them. Change control is the management of the project scope. Configuration

What are the implications of Environment in Economic Growth? Implications of Environment in Economic Growth: Only government can suppose liability for protecting natural res

What is the failure effectiveness of multi-national companies (transnationals) in the promotion of development? TNC FDI failure into hindering development: • TNCs are accus

How is the social capital measured? Measurement of the socilal capital: Social capital is a latest, multidimensional, qualitative idea which is problematic to measure. Res

In a model where a continuum of individuals have preferences for consumption and leisure as follows w i = c i + ln(x i ) and individuals differ in their labour endowments e

(a) Name three types of government interventions and 3 economic factors affecting the business environment and with given example explain how these affect the business environment.

Explain the user affects of involvement and support for IS project. User involvement and support: The commitment of employers and user management to the project can’t be

Is the Washington Consensus actually a consensus? The Washington agreement thinking dominates development thinking in the developed world but is challenged through less develo