FINS3623 Week 6 Tutorial - FINS3623 | Venture Capital Week...

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FINS3623 | Venture Capital Week 6 | VC Methods and Instruments 2014 Semester 2 | Howie Zhang
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Metapath Software
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FINS3623 Venture Capital Facts of the Case Who is Metapath? What are the deals being offered?
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FINS3623 Venture Capital Facts of the Case Metapath is a Seattle-based provider of software and services to wireless carriers. They market a software product which allows wireless carriers to see what calls were on their network at any point in time. Company profile Metapath is young, growing company, with current quarterly revenues of approximately $6.4M, however it is not yet profitable (excl. recent quarter profit) Customer concentration is high with all revenues being derived from just 4 major customers Metapath has high R&D, and Sales & Marketing expenses, cash balances are dropping and the company requires further capital injections to meet their goals Metapath is not yet ready for an IPO, with analysts concerned about the small customer base, and irregular earnings Two competing offers on the table: 1. VC investment from Robertson Stephens (RSC) and Technology Crossover Venture (TCV) and insiders seeking to co-invest a total $11.75M (equivalent to 13.5% stake, at post-money valuation of $86.75M) via the issuance of Series E Participating Convertible Preferred Stock. 2. Acquisition by CellTech via a scrip for scrip offer of CellTech common stock at a valuation of $115M, Founder will own 33% stake in CellTech upon completion Who is Metapath? What are the deals being offered?
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FINS3623 Venture Capital Question 1 Analyse Metapath’s capital (shareholdings) structure, in particular the various forms and prices of preferred stock from the multiple previous rounds of financing. How has this capital structure affected the offer from Robertson & Stephens? How would RSC’s participating preferred interact with the other tranches of preferred stock?
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FINS3623 Venture Capital Question 1 Analyse Metapath’s capital (shareholdings) structure, in particular the various forms and prices of preferred stock from the multiple previous rounds of financing. How has this capital structure affected the offer from Robertson & Stephens? How would RSC’s participating preferred interact with the other tranches of preferred stock? Series A and Series B Non-Convertible Redeemable Preferred Stock
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FINS3623 Venture Capital Question 1 Analyse Metapath’s capital (shareholdings) structure, in particular the various forms and prices of preferred stock from the multiple previous rounds of financing. How has this capital structure affected the offer from Robertson & Stephens? How would RSC’s participating preferred interact with the other tranches of preferred stock? Series A and Series B Non-Convertible Redeemable Preferred Stock The Non-Convertible redeemable Preferred Stock acts as almost a debt instrument. With STI entitled to receive immediate quarterly payments of LIBOR + 1% while BVP did not.
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