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Assignment - Cap Table Review

Assignment - Cap Table Review - REVIEWASSIGNMENT Work-out...

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REVIEW ASSIGNMENT Work-out problems A. You found a great company to buy. You agree to buy the company for $20,000,000. You are going to give yourself a carry and then bring in an investor to fund the $20,000,000. After you do that, you form a 15% option pool. What does the cap table look like? Primary % Fully Diluted % Me Investor Option Pool B. Fill in the yellow blanks Question 1 Question 2 Question 3 Question 4 Question 5 Company Pre-money $12m $6m Company Post-money $15m $10m $8m Mike's Investment $2m $4m $1m Mike's purchase of existing shares $5m Mike's ownership (post-investment) 20% 10% C. Explain at least two common preferences and conditions associated with Preferred Stock Agreements. D. You are asked to value a company with $10,000,000 in revenues and $1,000,000 in EBITDA. You know that a comparable company recently sold for 4x EBITDA. The company you are valuing has debt of $1,250,000 and assets of $4,000,000. The breakdown of the assets is as follows: Land: $1,000,000 (FMV of $2,500,000) Inventory: $1,000,000 (FMV of $1,000,000) Accounts Receivable: $2,000,000 (20% of it is probably uncollectible)
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