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23-25 (Show all your works to get full credits) EBV as 6M shares of convertible preferred stock. The employees of Newco have claims on common stock. Thus, following the Series A investment, Newco will have 10M is considering a S5M Series A investment in Newco. EBV proposes to structure the investment 1 OM shares of common shares outstanding and would have EBV estimates 16M shares outstanding on conversion of the CP. 4 25 percent probability for a successful exit, with an expected exit time in 5 years and an exit valuation of $500M. The $100M EBV fund has annual fees of 2 percent for each of its 10 years of life and earns 20 percent carried interest on all profits. Assume the following: The cost of venture capital is l 5%,GVM =2.5; expected retention for first round investors is 50%. GP% = 10%. What is your investment recommendation for EBV VCs (GPs) and LPs? What is your investment recommendation for EBV LPs? 23-25 (Show all your works to get full credits) EBV as 6M shares of convertible preferred stock. The employees of Newco have claims on common stock. Thus, following the Series A investment, Newco will have 10M is considering a S5M Series A investment in Newco. EBV proposes to structure the investment 1 OM shares of common shares outstanding and would have EBV estimates 16M shares outstanding on conversion of the CP. 4 25 percent probability for a successful exit, with an expected exit time in 5 years and an exit valuation of $500M. The $100M EBV fund has annual fees of 2 percent for each of its 10 years of life and earns 20 percent carried interest on all profits. Assume the following: The cost of venture capital is l 5%,GVM =2.5; expected retention for first round investors is 50%. GP% = 10%. What is your investment recommendation for EBV VCs (GPs) and LPs? What is your investment recommendation for EBV LPs

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