Driving Business Advantage

FOLEY HOAG LLP Driving Business Advantage Math Geek Part 1 Answer ■ Offer 1, even though it's a lower “pre-money valuation." Effectively values the outstanding common stock higher because it includes a smaller post-money option pool. Here's the math: - Common Stock - Total Post-money ■ Offer 2 Values: - - Option Pool Common Stock · Total Post-money ■ Offer 1 Values: O/S % FD % - Preferred Stock $ 5,000,000 37% 33% Option Pool 1,500,000 ΝΑ 10% 8,500,000 63% 57% $15,000,000 Preferred Stock $ 5,000,000 39% 31% 3,200,000 ΝΑ 20% 7,800,000 61% 49% $16,000,000 © 2014 Foley Hoag LLP. All Rights Reserved. 19

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