Scenario B. The company achieves a modest exit without raising additional capital. The potential range...
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Scenario B. The company achieves a modest exit without raising additional capital. The potential range of exit values are $4 million, $10 million, and $50 million.
Company Exit Price 1X Liquidation Pref
No Participation
1 x Liquidation Preference
Participating
3 X Participation Cap
3X Liquidation Preference
Participating
No Participation Cap
$ 4 Million $ 10 Million $50 Million
Calculate the nine potential payouts in Scenarios B and C and for each of the 9 cells, show your payout and note in which scenarios you choose to convert. Also be sure to anser the two following questions on the last slide:
- What is the best liquidation preference strategy for your Dabble investment? Why?
- What is the best liquidation preference strategy for an early stage VC in general? Why?
Scenario B. The company achieves a modest exit without raising additional capital. The potential range of exit values are $4 million, $10 million, and $50 million.
| Company Exit Price | 1X Liquidation Pref No Participation | 1 x Liquidation Preference Participating 3 X Participation Cap | 3X Liquidation Preference Participating No Participation Cap |
| $ 4 Million | |||
| $ 10 Million | |||
| $50 Million |
Calculate the nine potential payouts in Scenarios B and C and for each of the 9 cells, show your payout and note in which scenarios you choose to convert. Also be sure to anser the two following questions on the last slide:
- What is the best liquidation preference strategy for your Dabble investment? Why?
- What is the best liquidation preference strategy for an early stage VC in general? Why?
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