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Assignment - CE Tech II

Assignment - CE Tech II - their shares you might include or...

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Bus M 475 Case Study Assignment “CE Technologies Part 2” Raising Additional Funds Professor Jones initially thought that the company would not need additional capital  beyond the initial investment. However, he soon realized that cash was tight and in order  to grow they would need to raise more money. Professor Jones set a goal to raise $5,000,000 from investors but was also concerned  about his employees and wanted to give them incentive to remain involved in the growth  of the business.  A friend suggested that the company create an option pool for the  employees which would account for 10 percent of the company’s stock on a fully-diluted  basis. Assignment Start with the cap table you created last week. From there, update the cap table for how  YOU would have done it (i.e make corrections and improve your assumptions). This  might mean you issue the employees options vs. shares, you might have them pay for 
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Unformatted text preview: their shares, you might include or exclude the expense of getting out of the employment agreement, etc. Once you’ve updated the cap table and cleaned it up, you should use the information above to: Determine how you would structure your $5 million investment Include the type of shares you purchase and terms of the stock Value the business and calculate the pre- and post-money Add an option pool Show two complete cap tables: one for before the $5mm round that includes your corrections and a second that shows the cap table, post the investment and option pool As you do this, think about: The structure of your investment in the business What your pre-money valuation is and why What step-up or step-down this is for the existing shareholders How this changes the ownership and voting structure...
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