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  • Anti-Dilution Problem Answer

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    Dhruv Kapoor
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    The document describes an anti-dilution problem involving a company that has received multiple rounds of funding. It shows the details of previous funding rounds for founders, Series A and Series B investors. For a proposed Series C round at $1.71 per share, it calculates that under full-ratchet anti-dilution the Series B investor would receive 847,953 additional shares, while under weighted average the Series B investor would receive 282,651 additional shares to maintain their ownership percentage post financing.

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    Anti-Dilution_Problem_Answer

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    The document describes an anti-dilution problem involving a company that has received multiple rounds of funding. It shows the details of previous funding rounds for founders, Series A and Series B investors. For a proposed Series C round at $1.71 per share, it calculates that under full-ratchet anti-dilution the Series B investor would receive 847,953 additional shares, while under weighted average the Series B investor would receive 282,651 additional shares to maintain their ownership percentage post financing.

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    5 views1 page

    Anti-Dilution Problem Answer

    Uploaded by

    Dhruv Kapoor
    The document describes an anti-dilution problem involving a company that has received multiple rounds of funding. It shows the details of previous funding rounds for founders, Series A and Series B investors. For a proposed Series C round at $1.71 per share, it calculates that under full-ratchet anti-dilution the Series B investor would receive 847,953 additional shares, while under weighted average the Series B investor would receive 282,651 additional shares to maintain their ownership percentage post financing.

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    Anti-Dilution

    Problem #16
    Investment $10,000,000 $1,000,000 $0
    Equity Part Pref (2x) Conv Pref (1x) Common
    Dividends 10% 8% 0
    Hold Times 19 Months 31 Months 48 Months

    Founders 13,000,000 61.90%


    Series A 3,000,000 14.29%
    Series B 5,000,000 23.81%

    Suppose A Series C is offering to invest $5,000,000 @ 1.71 Per Share

    If Series B had Full-Ratchet Anti-Dilution, how many more shares will that
    company have to issue it?

    Full Rachet

    5,847,953 $10,000,000 /1.71


    5,847,953 5,000,000 847,953

    Weighted Average

    Series B $ 10,000,000 5,000,000


    Series C $ 5,000,000 2,923,977
    $ 15,000,000 7,923,977

    WASP 1.89298893
    5,282,651 $10,000,000 /1.892
    5,282,651 5,000,000 282,651

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