2 Financial problems
Problem 1
In July 2017, the startup company ABC raised $1 million ($1,000,000) angel funding from investor Brad. Company ABC’s sole founder and CEO, Greg, offered Brad the “same kind of stock that I own – common stock.” Brad was happy to receive common stock and a $9 million ($9,000,000) pre-money valuation for his investment. What percentage of the company ABC did Brad own in July 2017 immediately after his angel investment?
The Snap Inc., went public (IPO) on March 2rd, 2017. The chart below was based on its SEC Form 424B4 filing. Read the chart and answer questions:
IPO Status |
Priced |
Symbol |
SNAP |
Exchange |
NYSE |
Price to Public |
$17.00 |
Underwriting Discounts and Commission |
$0.425 |
Proceeds to Snap Inc. |
$16.575 |
Proceeds to Selling Stockholders |
$16.575 |
Class A common stock offered by Snap Inc. |
145,000,000 shares |
Class A common stock offered by the selling stockholders |
55,000,000 shares |