A Founder is raising money via a Series A round for her DeFi platform company. She wishes to raise $25mm in the A round. She receives two term sheets as detailed below.
• Termsheet 1: $30mm invested for 30% of the company, standard terms and conditions
including a single dip liquidation preference
• Termsheet 2: $30mm invested for 10% of the company, the same standard terms and
conditions as Termsheet 1 with the exception of a double dip liquidation preference and
an 8% cumulative PIK dividend
If the company is sold in three years, what is the minimum sale price that the Founder would
been better off if they had accepted Termsheet 2?
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