The founders of a startup award themselves 1,000,000 shares of Series A common stock. The company then undergoes two rounds of external funding. The table below shows the number of shares issued and the price per share during each round. The tabl also shows the liquidation preference for the shareholders in each round. Each round has seniority over all previous rounds. Series B and Series C shareholder have the right to convert their shares to common shares at any point. Round Number Price Liquidati Pref. Share |of Per Shares Series 400,000 |2.75 |2.3x B Series 250,000 |3.50 |1.7x |C The company is sold for 3,250,00 Determine the amount of money received by the Series B shareholders.

The founders of a startup award themselves 1,000,000 shares of Series A common stock. The company then undergoes two rounds of external funding. The table below shows the number of shares issued and the price per share during each round. The tabl also shows the liquidation preference for the shareholders in each round. Each round has seniority over all previous rounds. Series B and Series C shareholder have the right to convert their shares to common shares at any point. Round Number Price Liquidati Pref. Share |of Per Shares Series 400,000 |2.75 |2.3x B Series 250,000 |3.50 |1.7x |C The company is sold for 3,250,00 Determine the amount of money received by the Series B shareholders.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

The founders of a startup award
themselves 1,000,000 shares of
Series A common stock. The
company then undergoes two
rounds of external funding. The
table below shows the number of
shares issued and the price per
share during each round. The table
also shows the liquidation
preference for the shareholders in
each round. Each round has
seniority over all previous rounds.
Series B and Series C shareholders
have the right to convert their
shares to common shares at any
point.
Round Number Price Liquidation
of
Per
Pref.
Shares
Share
Series 400,000 2.75 2.3x
B
Series 250,00 |3.50 |1.7x
C
The company is sold for 3,250,000.
Determine the amount of money
received by the Series B
shareholders.
O 1,762,500
O 1,551,000
1,657,000

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