Ownership Casey McGlynn

Ownership Corporation vs. Partnerships Common vs. Preferred Stock –Rights, vesting, cost Ownership and control Corporation vs. Partnerships Common vs. Preferred Stock –Rights, vesting, cost Ownership and control

Cost of Stock Common Stock for –IP, compensation, cash Preferred Stock for –CASH Mechanisms for setting price Common Stock for –IP, compensation, cash Preferred Stock for –CASH Mechanisms for setting price

Typical Stock Ownership for Venture Backed Companies President % COO % Vice President % CFO % Director Level % Board Member %

Dilution Why does my % ownership keep getting smaller? What is a common dilution during funding –Cap Table Example Smaller slice of a bigger pie Why does my % ownership keep getting smaller? What is a common dilution during funding –Cap Table Example Smaller slice of a bigger pie

Typical Valuations by Stage # Shares$/Share$ MillionsOwnership PreMoney Management2.835% Option Pool1.215% TOTAL4.0$1.00$4.0 Preferred A4.0$1.00$4.050% Post Money8.0$1.00$8.0 START-UP

Typical Valuations by Stage # Shares$/Share$ MillionsOwnership PreMoney Management 4.028% New Option Pool 1.510% Preferred A 4.028% TOTAL 9.5$2.00$19.0 Preferred B 5.0$2.00$10.034% Post Money14.5$2.00$29.0 EXPANSION

Typical Valuations by Stage # Shares$/Share$ MillionsOwnership PreMoney Management 5.527% New Option Pool 1.15% Preferred A & B 9.043% TOTAL15.6$3.50$54.6 Preferred C 5.0$3.50$17.525% Post Money20.6$3.50$72.1 MEZZANINE

Typical Valuations by Stage # Shares$/Share$ MillionsOwnership PreMoney Management % New Options % Preferred A, B & C % TOTAL22.6$8.00$ IPO 6.25$8.00 $ % Post Money 28.85$8.00$ IPO