Up Round: 1 on 3, 3on 10

Report
VCIC Math Help Deck
©2013 Patrick Vernon1
•2
•3
•4
•5
Negotiated
1
Inv = $1M
3
Shares $1
Pre = $1M
2 Post = $2M
1M
VC
1M
Up Round:
1on1, 2on3
5
4
Shares
•1
Series A
Negotiate pre-money valuation and
investment amount
Pre + investment = post-money valuation
Choose share price ($1)
Calculate number of shares assigned
Owned/total shares = % ownership
Ownership
VC: 1M/2M = 50%
Founders: 1M/2M = 50%
Founder
2M Shares
2
Up Round:
1on1, 2on3
1
4
Inv = $1M
$1
Pre = $1M
Post = $2M
VC
1M
1.3M
$1.50
VC
3
Pre = $3M
2M
These two set
the price
Series A
3÷2=$1.50
1M VC
1M Founder
Shares
1M
Negotiated
Inv = $2M
Shares
•4
•5
Negotiated
•1
•2
•3
Series B
Negotiate pre-money and investment
Pre + invest. = post-money valuation
Calculate new share price
(pre-money B divided by A total shares)
Calculate number of shares assigned
Owned/total shares = % ownership
Founder
2M Shares
3
2 Post = $5M
B Pre $3M
2M Shares
Multiplier: 1.5X
5
3.3M Shares
Ownership
VC: 2.3M/3.3M = 70%
Founders: 1M/3.3M = 30%
3
•2
•3
•4
•5
Negotiated
1
2M
Inv = $2M
VC
3
Pre = $4M Shares $1
2 Post = $6M
4M
Up Round:
2on4, 12on12
4
Shares
•1
Series A
Negotiate pre-money valuation and
investment amount
Pre + investment = post-money valuation
Choose share price ($1)
Calculate number of shares assigned
Owned/total shares = % ownership
Founder
5
Ownership
VC: 2M/6M = 33%
Founders: 4M/6M = 67%
6M Shares
4
Up Round:
2on4, 12on12
1
Inv = $2M
Pre = $4M
Post = $6M
VC
$1
4M
4
Inv = $12M
3
Pre = $12M
2 Post = $24M
B Pre $12M
6M Shares
Multiplier: 2X
VC
3
Founder
6M Shares
6M
$2
5
These two set
the price
12÷6=$2
6M
Shares
2M
Negotiated
•4
•5
Shares
•1
•2
•3
Series B
Negotiate pre-money and investment
Pre + invest. = post-money valuation
Calculate new share price
(pre-money B divided by A total shares)
Calculate number of shares assigned
Owned/total shares = % ownership
Series A
2M VC
4M Founder
12M Shares
Ownership
VC: 8M/12M = 67%
Founders: 4M/12M = 33%
5
•2
•3
•4
•5
Negotiated
1
Inv = $1M
3
Shares $1
Pre = $1M
2 Post = $2M
1M
VC
1M
Down Round:
1on1, 1on1.5
5
4
Shares
•1
Series A
Negotiate pre-money valuation and
investment amount
Pre + investment = post-money valuation
Choose share price ($1)
Calculate number of shares assigned
Owned/total shares = % ownership
Ownership
VC: 1M/2M = 50%
Founders: 1M/2M = 50%
Founder
2M Shares
6
Down Round:
1on1, 2on1.5
1
4
$1
Pre = $1M
Post = $2M
VC
1M
Inv = $2M
2.7M
VC
3
Pre = $1.5M
Founder
2M Shares
$0.75
2 Post = $3.5M
3 B Pre $1.5M
÷ 2M Shares
Multiplier: .75X
These two set
the price
1.5÷2=.75
2M
Shares
1M
Inv = $1M
Negotiated
•4
•5
Shares
•1
•2
•3
Series B
Negotiate pre-money and investment
Pre + invest. = post-money valuation
Calculate new share price
(pre-money B divided by A total shares)
Calculate number of shares assigned
Owned/total shares = % ownership
1M VC
1M Founder
4.7M Shares
Ownership
VC: 3.7M/4.7M = 79%
Founders: 1M/4.7M = 21%
7
Practice
•
•
•
•
•
1 on 3, 3 on 10
3 on 3, 5 on 8
2 on 1, 3 on 6, 10 on 15
1 on 1, 4 on 2
3 on 5, 5 on 5
8
1 on 3, 3 on 10
1.
2.
3.
4.
$1 inv on $3 pre
$1 + $3 = $4 post
$1
1M VC, 3M Founder
Total = 4M shares
5. VC 1÷4 = 25%
Founder 3÷4 = 75%
1.
2.
3.
4.
5.
Negotiate Pre and Inv
Pre + inv. = post-money
Share price
Calculate shares
% ownership
1. $3 inv. on $10 pre
2. $3 + $10 = $13 post
3. $10 pre ÷ 4M shares =
$2.5/share
4. $3 inv. ÷ $2.5 = 1.2M
new shares for VC
Total shares 5.2M
5. VC 1.2+1=2.2÷5.2=42%
Founder 3÷5.2=58%
9
3 on 3, 5 on 8
1.
2.
3.
4.
$3 inv on $3 pre
$3 + $3 = $6 post
$1
3M VC, 3M Founder
Total = 6M shares
5. VC 3÷6 = 50%
Founder 3÷6 = 50%
1.
2.
3.
4.
5.
Negotiate Pre and Inv
Pre + inv. = post-money
Share price
Calculate shares
% ownership
1. $5 inv. on $8 pre
2. $5 + $8 = $13 post
3. $8 pre ÷ 6M shares =
$1.3/share
4. $5 inv. ÷ $1.3 = 3.8M
new shares for VC
Total shares 9.8M
5. VC 3.8+3=6.8÷9.8=69%
Founder 3÷9.8=31%
10
1.
2.
3.
4.
5.
Negotiate Pre and Inv
Pre + inv. = post-money
Share price
Calculate shares
% ownership
2 on 1, 3 on 6, 10 on 15
1.
2.
3.
4.
$2 inv on $1 pre
$2 + $1 = $3 post
$1
2M VC, 1M Founder
Total = 3M shares
5. VC 2÷3 = 67%
Founder 1÷3 = 33%
1. $3 inv. on $6 pre
2. $3 + $6 = $9 post
3. $6 pre ÷ 3M shares =
$2/share
4. $3 inv. ÷ $2 = 1.5M new
shares for VC
Total shares 4.5M
5. VC 1.5+2=3.5÷4.5=78%
Founder 1÷4.5=22%
11
1.
2.
3.
4.
5.
Negotiate Pre and Inv
Pre + inv. = post-money
Share price
Calculate shares
% ownership
2 on 1, 3 on 6, 10 on 15
1.
2.
3.
4.
$10 inv. on $15 pre
$10 + $15 = $25 post
$15 pre ÷ 4.5M shares = $3.33/share
$10 inv. ÷ $3.33 = 3M new shares for VC
Total shares 7.5M
5. VC 6.5÷7.5=87%
Founder 1÷7.5=13%
12
3 on 5, 5 on 5
1.
2.
3.
4.
$3 inv on $5 pre
$3 + $5 = $8 post
$1
3M VC, 5M Founder
Total = 8M shares
5. VC 3÷8 = 37.5%
Founder 5÷8 =
62.5%
1.
2.
3.
4.
5.
Negotiate Pre and Inv
Pre + inv. = post-money
Share price
Calculate shares
% ownership
1. $5 inv. on $5 pre
2. $5 + $5 = $10 post
3. $5 pre ÷ 8M shares =
$0.625/share
4. $5 inv. ÷ $.625 = 8M
new shares for VC
Total shares 16M
5. VC 8+3=11÷16=69%
Founder 5÷16=31%
13
1 on 1, 4 on 2
1.
2.
3.
4.
$1 inv on $1 pre
$1 + $1 = $2 post
$1
1M VC, 1M Founder
Total = 2M shares
5. VC 1÷2 = 50%
Founder 1÷2 = 50%
1.
2.
3.
4.
5.
Negotiate Pre and Inv
Pre + inv. = post-money
Share price
Calculate shares
% ownership
1. $4 inv. on $2 pre
2. $4 + $2 = $6 post
3. $2 pre ÷ 2M shares =
$1/share
4. $4 inv. ÷ $1 = 4M new
shares for VC
Total shares 6M
5. VC 4+1=5÷6=83%
Founder 1÷6=17%
14
Practice
• 1 on 2 with 20% option pool
• 2 on 4 with 10% option pool
• 3 on 3 with 5% option pool
1 on 2 w/20% option
1.
2.
3.
4.
5.
6.
1.
2.
3.
4.
5.
Negotiate Pre and Inv
Pre + inv. = post-money
Share price
Calculate shares
% ownership
$1 inv on $2 pre
$1 + $2 = $3 post
$1
1M VC, 2M Founder, Total = 3M shares
VC 1÷3 = 33%, Founder 2÷3 = 67%
Option Pool 20% out of Founder, now 47%
16
1.
2.
3.
4.
5.
Negotiate Pre and Inv
Pre + inv. = post-money
Share price
Calculate shares
% ownership
3 on 3 with 5% option
1.
2.
3.
4.
5.
6.
$3 inv on $3 pre
$3 + $3 = $6 post
$1
3M VC, 3M Founder, Total = 6M shares
VC 3÷6 = 50%, Founder 3÷6 = 50%
Option Pool 5% out of Founder, now 45%
17
1.
2.
3.
4.
5.
Negotiate Pre and Inv
Pre + inv. = post-money
Share price
Calculate shares
% ownership
2 on 4 with 10% option
1.
2.
3.
4.
5.
6.
$2 inv on $4 pre
$2 + $4 = $6 post
$1
2M VC, 4M Founder, Total = 6M shares
VC 2÷6 = 33%, Founder 4÷6 = 67%
Option Pool 10% out of Founder, now 57%
18

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