VC

Hey, 

Could someone help me on this ?

Thank you 


Imagine the following scenario:

On 4 June 2019 TransferWise raises a convertible loan totalling $110m from a consortium of Goldman Sachs and TGP Capital Partners. The loan terms include a discount of 20% on the share price, a qualified transaction multiple of 2x, and a maturity of 28 months. The consortium additionally demands a 4% annual interest on the loan.

On 6 May 2020, Deutsche Bank’s corporate VC makes an offer to acquire 19% of TransferWise at a per share price of $32 in a new funding round (Series F) as a sole investor. The offer represents a down round (senior to all previous rounds and with a liquidation preference multiple of 1,5x) and comes on the heels of operational and regulatory challenges experienced by TransferWise. As part of the financing Deutsche Bank demands that all investors from Series E exercise their pro-rata rights in Series F financing round (i.e. buy equity to avoid Series F dilution).

Existing investors reluctantly agree to the terms of the round. On 18 September 2021 Deutsche Bank comes back with a full offer to acquire the rest of the company at $37 per share.

If the shareholders agree to the sale 

Calculate the return on Andreessen Horowitz’s total investment in the start-up 

 

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