1. Consider that you hold securities in a company that has just accepted an investment of $10 million in 6x liquidation at $3 million pre-money. How would you value this company if you were the “new money”? The previous investors?
2. If a mezzanine investor has received warrant coverage for 5 percent of a $3 million loan where the equity investors are paying $2.50 per share, how many shares will she be able to buy and at what price?
3. Assume Max and Sam are negotiating their first round in SpecialStuff. Sam is sure that $3 million is all that will be needed, but Max believes it will take at least twice that. Max is willing to invest $3 million in this round of ownership somewhere between 25% and 40%. What do you think the final deal will look like and why?