A VC firm invests $12 million in a startup at $1 per share for a Series A investment. Suppose that it is three years after the Series A investment, and another VC makes a Series B investment for 10M shares of the startup firm at $0.5 per share. Founders own 10 million shares in the firm. Following the Series B investment, what percentage of the startup (fully diluted) would be controlled by first VC if:
a. Series A has full-ratchet anti-dilution protection.
b. Series A has weighted-average anti-dilution protection.
c. How will anti-dilution clauses affect calculations for the series B financing ownership stakes if the series B price per share was $2? (One sentence answer)