Give you answers to the nearest whole dollar.
Assumptions:
I invested $500,000 to own 1/6th of a company. The company is sold after three years.
Questions:
1) If I have a 1x liquidation preference (non-participating) and the company is sold for $10 million, how much is my payout?
2) If I have a 2x participating liquidation preference and the company is sold for $10 million, how much is my payout?
3) If I have a 4x liquidation preference (non-participating) and the company is sold for $1.75 million, how much is my payout?
4) If I don’t have a liquidation preference and the company is sold for $1 million in a fire-sale, how much is my payout, and how much do the founders (who own the other 5/6ths of the company) receive from the disposal even though they lost me money?
Best of luck.