If the stock options are authorized but not issued or


1. Consider the following Capitalization (CAP) table for ABC Technology, Inc.:

Shareholder

Shares Before

% Undiluted

% Fully Diluted

Shares After Investment

% Fully Diluted

Co-founder 1

150,000

 

35.3

 

 

Co-founder 2

150,000

 

35.3

 

 

Co-founder 3

100,000

 

23.5

 

 

Stock Options

25,000

 

5.9

 

 

XYZ Ventures, LP

0

 

0

 

 

Total

425,000

 

100

 

 

a. If the stock options are authorized but not issued or outstanding, what undiluted percentage of the company does each shareholder own before XYZ Ventures, LP invests?

b. If XYZ Ventures, L.P invests $1,500,000, and pays $20 per share, complete the CAP table on a fully diluted basis.

c. What is the pre-money and post-money valuation?

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Business Management: If the stock options are authorized but not issued or
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