Three years ago, you founded your own company. You invested $ 114 comma 000 of your own money and received 5.7 million shares of Series A preferred stock. Your company has since been through three additional rounds of financing. Round Price ($) Number of Shares Series B 0.75 1 comma 000 comma 000 Series C 3.50 500 comma 000 Series D 7.50 600 comma 000 Assuming that you own only the Series A preferred stock (and that each share of all series of preferred stock is convertible into one share of common stock), what percentage of the firm do you own after the last funding round? After the last funding round, you will own nothing %. (Round to one decimal place.) Enter your answer in the answer box.

Question

Business

Xavier Vaughn

29 August, 12:41

Three years ago, you founded your own company. You invested $ 114 comma 000 of your own money and received 5.7 million shares of Series A preferred stock. Your company has since been through three additional rounds of financing. Round Price ($) Number of Shares Series B 0.75 1 comma 000 comma 000 Series C 3.50 500 comma 000 Series D 7.50 600 comma 000 Assuming that you own only the Series A preferred stock (and that each share of all series of preferred stock is convertible into one share of common stock), what percentage of the firm do you own after the last funding round? After the last funding round, you will own nothing %. (Round to one decimal place.) Enter your answer in the answer box.

+1

Answers (1)

Know the Answer?

Keira Hickman · Answer 1

The owner's % holding is 1.6%

Explanation:

The percentage of the owner's holding in the company can be computed by making reference to the proportion of the cash invested viz-a-viz the other three rounds of financing received by the firm thereafter:

Round A preferred stock $114,000

Round B shares ($0.75*1,000,000) $750,000

Round C series ($3.50*500,000) $1,750,000

Round D series ($7.50*600,000) $4,500,000

Value of the company $7,114,000.

the owner's % holding=$114,000/$7114000

=1.6%