Question Description
I’m working on a accounting multi-part question and need an explanation and answer to help me learn.
Your company raises a $3m A-round at a $7m pre-$ valuation, with investors receiving a basic liquidation preference.
a. How much will common shareholders receive if the company sells for $50m?
b. How much will common shareholders receive if the company sells for $5m?
c. How much would the company have to sell for in order for common shareholders to receive a total of $5m?
d. How much would the company have to sell for in order for common shareholders to receive a total of $50m?
