Question on liquidation proceeds
For simplicity, assume a company is being sold on a cash-free, debt-free basis for $100 purchase price (EV). Cap table includes 50 shares of common stock and 50 shares of options, all with a strike price of $0.50.
With 100 fully diluted shares outstanding, each share is worth $1. Is it correct to assume all the option holders combined will receive $25 ($1 share value - $0.50 strike price) x 50 shares of options?
On a gross basis (excluding strike price), all common and option holders will receive $100. But on a net basis taking into consideration of strike prices, total proceeds to both common and option holders will be $75, and not the entire $100 purchase price? Is that correct?
