MV per share

EPS
NI
Common Stock
EPS
MV per share
50%

500,000,000
1,000,000
500
10,000
1

Net Income
DF
FV of Investment
MV of Share
Number of Shares

0.67x
3,796,875,000
10,000
379,688

0.44x

0.30x

500,000,000
0.20x
0.13x

10,000,000,000
3,796,875,000
37.97%

MV of share

379687.5
62.03%
612,091
1,612,091
816.872428

1a

IRR
NI in year 5

(A)

PE Ratio

(B)

Current number of shares

(C)

EPS

(D) = (A)/(C)

MV per share at year 5

(E) = (D)*(B)

Investment proposed

(F)

FV of Investment Proposed in year 5

Total Market Value of venture at end of year 5

(G) = (F)*(1+IRR)^5
(H) = (C)*(E)

% ownership to be acquired

(I) = (G)/(H)

% ownership with Founders

(J) = 100% - (I)

Number of Shares acquired

(K) = (I)/(J)*(C)

Price per share

(L) = (F)/(K)

1b

IRR
Proposed Investment sought
FV of Investment Proposed in year 5
Total Market Value at end of year 5 (from 1a)
Number of Shares Outstanding
% ownership acquired (ownership to be given up)

(A)
(B) = (A)*(1+IRR)^5
(C)
(D)
(E) = (A)/(C)

% ownership with Founders

(F) = 100% - (E)

Number of Shares acquired

(G) = (E)/(F)*(D)

Price per share

(H) = (A)/(G)

Particulars
Investment Proposed

(A)

Total number of current shares

(B)

% of stock options

(C)

Balance owned by VC and Founders (Retention %)

Final Ownership % needed based on Q1
Current Ownership % (based on retention % )

(D) = 100% - (C)

(E)
(F) = (E)/(D)

Balance owned Founders

(G) = 100% - (D)

Number of Shares to be purchased

(F) = (F)/(B)*(G)

Price per share

3a & b

(H) = (A)/(F)
Particulars

Proposed Investment
IRR %
FV of investment by year 5
Total Market Value of venture in year 5

(A)
(B)
(C) = (A)*(1+(B))^5
(D)

Final Ownership % in year 5

Retention % (after all further dilutions)
Current % ownership

(G) = (E)/(F)

Owned by others

(H) = 100% - (G)

Number of Shares outstanding

Number of Shares acquired
Price per share
3a & b

(E) = (C)/(D)
(F) = 100%-15%-R2 inv

(I)
(J) = (G)/(H)*(I)
(K) = (A)/(J)

Particulars
Proposed Investment

(A)

IRR %

(B)

FV of investment by year 5
Total Market Value of venture in year 5
Final Ownership % in year 5
% of management shares reserved after round 1
Number of shares reserved for stock options
Retention % (after all further dilutions)
Number of Shares outstanding
Current Ownership %

(C) = (A)*(1+(B))^5
(D)
(E) = (C)/(D)
(F) = 15%/ (1-E)
(G) = (F)/(100%-F)*(I)
(H) = 100%-15%-R2 inv
(I)
(J) = (E)/(H)

Owned by others

(K) = 100% - (J)

Number of Shares acquired

(L) = (J)/(K)*(I)

Price per share

3c

(K) = (A)/(J)
Particulars

Desired Management Ownership %

(A)

Final ownership in year 5 as per 3a & 3b

(B)

% of management shares reserved after round 1

Original shares outstanding

(B) = 15%/ (1-B)

(C)

Number of Shares reserved for Stock Options

(D) = (B)/(100%-B)*(C)

Number of shares outstanding as at Round 1

(E)

Total number of shares outstanding incl Options

(F) = (D)+(E)

Particulars
Current Ichiban's shares from 3a
Final Ownership % at end of year 7
Share of market Value of the venture
Expected IRR for Ichiban
Proposed Investment for Round 2 Inv
Required IRR for round 2 investors
FV of the investment for Round 2 Inv
Final Ownership % at end of year 7
Retention % for Ichiban
Current Ownership % for Ichiban
Solving for additional shares to be acquired

(G)
(H) = (G)/(F)
(I)
(J) = ((I)/500m)^(1/7)-1
(K)
(L))
(M) = (K)*(1+(L))^5
(N)
(O) = 100%-(N)
(P) = (H)/(O)
(Q) = ((G)+x)/((F)+x) = (P)

Total Number of shares for Ichiban

Price per share for Ichiban
New shares outstanding after Round 1

(T) = (R)+(C)+(D)

Number of shares allocated to Round 2

(U) = ((N)/(1-(N))*(T)

Price per share for Round 2 Investors

3d

Owners
Proposed Investment
Current Ownership as per 3c
100% ownership value as per Q2
FV of the Investment
IRR

Particulars
Proposed Investment as per 1a
Price of the Stock as per 1a
Number of shares as per 1a
Preferred Stock Dividend
Dividend per share
Total Dividend for year 1
Total Dividend for year 2
Total Dividend for year 3
Total Dividend for year 4
Total Dividend for year 5
Total Dividend for year 6
Total Dividend for year 7
Total Dividends for 7 years
Total preferred Stock value
Effective rate of return
Total FV of Investment
Total Dividend receivable
Ichiban's total investment
Firm's Total Value
Ichiban's share

(R)
(S) = 500m/(R)

Particulars

(V) = (K)/(U)

Proposed Investment as per Q1a

(A)

Ownership % needed

(B)

Dividend %

(C)

Conversion factor for one Preferred stock

Number of Preferred Shares as per Q1a

(D) = ((1+(C))^5
(E)

Number of Common Shares

(F) = (D)*(E)

Current Shares Outstanding

(G)

Total Shares outstanding at end of year 5

(H) = (F)+(G)

Effective ownership %

(I) = (F)/(H)

Market Value of the Venture

Share of Ichiban's Market Value
Effective IRR

(J)
(K) = (J)*(I)
(J) = ((K)/(A))^(1/5)-1

Particulars
Proposed Investment by Ichiban
IRR
Expected FV of Investmemt

(A)
(B)
(C) = (A)*(1+(B))^5

Terminal Value of the venture

(D)

Probability of Success

(E)

Probability weighted Terminal Value

Downside Value
Probability of Failure

(F) = (D)*(E)
(G)
(H)

Total Post money Valuation

(I) = (F)+((G)*(H))

PV of Post money valuation

(J) = (I)*(1/(1+B))^5

Pre Money Valuation

(K) = (J)-(A)

50%

30%

500,000,000

500,000,000

20.0x

20.0x

1,000,000

1,000,000

500

500

10,000

10,000

500,000,000

500,000,000

3,796,875,000

1,856,465,000

10,000,000,000

10,000,000,000

37.97%

18.56%

62.03%

81.44%

612,091

227,968

1,612,091

816.9

2,193.3

241,814
1,370,277

50%

30%

1,200,000,000

1,200,000,000

9,112,500,000

4,455,516,000

10,000,000,000

10,000,000,000

1,000,000

1,000,000

91.13%

44.56%

8.88%

55.44%

10,267,606

803,594

116.87

1,493.3

Keiko Ichiban
500,000,000
1,000,000
15%
85%
37.97%
44.67%
55.33%
807,309
619.34
Keiko Ichiban

Round 2 Inv.

500,000,000

300,000,000

50.0%

30.0%

3,796,875,000

659,100,000

10,000,000,000

10,000,000,000

37.97%

6.59%

78.41%

85.00%

48.42%

7.75%

51.58%

92.25%

1,000,000

1,938,885

938,885

162,981

532.5

1,840.7

Keiko Ichiban

Round 2 Inv.

500,000,000

300,000,000

50.0%

30.0%

3,796,875,000

659,100,000

10,000,000,000

10,000,000,000

37.97%

6.59%

27.06%

27.06%

24.18%

370,918
78.41%

100.00%

1,000,000

2,309,803

48.42%

6.59%

51.58%

93.41%

938,885

162,981

532.5

1,840.7

Ichiban

Round 2

15.0%
37.97%

0
6.59%

27.06%

51.6%

1,000,000
370,918

1,938,885
2,309,803
Ichiban

Round 2

938,885

938,885

40.65%
4,064,784,978
34.90%
300,000,000

51.6%

30.0%
1,113,879,000
11.14%
88.9%
45.7%
216,912

17,301,835

1,155,797
432.6
2,526,714.5
316,725
947.2
1,056,575
117,690
54.256925176993200%
216911.7527

Ichiban
0
#REF!
2,309,803
#REF!
51.6%
7 year IPO

5 year IPO

500,000,000

500,000,000

816.9

2,193.3

612,091

227,968

1.61051

10.0%

10.0%

612,091

81.7

219.3

985778.1612

50,000,000

50,000,000

1,000,000

55,000,000

55,000,000

1,985,778

60,500,000

60,500,000

49.64%

66,550,000

66,550,000

73,205,000

73,205,000

80,525,500

88,578,050

474,358,550

305,255,000

974,358,550

805,255,000

13.6%

12.2%

370,918

3,796,875,000

474,358,550

305,255,000

474,729,468

4,102,130,000

10,000,000,000

10,000,000,000

4.7%

41.0%

5 year IPO

500,000,000
37.97%
10%
1.61
612,091
985,778
1,000,000
1,985,778
49.64%
10,000,000,000
4,964,190,766
58.26%

Takashi Ven

Kotobuki

500,000,000

500,000,000

30.0%

30.0%

1,856,465,000

1,856,465,000

10,000,000,000

10,000,000,000

50%

60%

5,000,000,000

6,000,000,000

4,000,000,000

50%

40%

7,000,000,000

6,000,000,000

1,885,303,520

1,615,974,446

1,385,303,520

1,115,974,446

0.269329074

10,000,000,000
7,298
520,277
32.27%
15%
47.27%
52.73%