Question: Suppose founders own 70% of company ING and VC's preferred stock shares are convertible at $1 per share. VC#1 has already put in $5M. In 12 months, an infusion of $1M from VC#2 who is given 1.5M shares.
a) What is ownership of three parties after full ratchet?
b) If the term sheet contains broad weighted average ratchet, what is the ownership of each party after second round?