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NewCo Inc.

Pro Forma Cap Table
Start-up Capitalization

Founders
Options Granted
Options Available
Investor 1
Investor 2
Investor 3
Total
Pre-Money Valuation
Price / Share
Total $ Invested
Post-Money Valuation
Date

Common
1,000,000

1,000,000

Total
1,000,000
0
0
0
0
0
1,000,000

%
100.0%
0.0%
0.0%
0.0%
0.0%
0.0%
100.0%

Series A
Investment

$
$
$
$

1,000,000
1,000,000

$
$
$
$

3,000,000
3.00
1,000,000
4,000,000
6/30/2009

Series A Funding
Series A
Post-Money
Preferred
Total
1,000,000
333,333
333,333
333,333
1,333,333

FD
%
75.0%
0.0%
0.0%
25.0%
0.0%
0.0%
100.0%

Founders diluted by 25%
Investor desires 25%
ownership.

000.000.667 416.0% 0.000.000.000 0 250.000 1.000.0% 15.0% 0.0% 0.NewCo Inc.667 FD % 60.0% 0.0% 100.4 million.000 $ $ $ $ 3.000.000 416.000 New Option Pool Pre-Money Total 1.000 250.000 % 100.000 1.000.0% 0.000 250.0% 0.000 $ $ $ $ 1.0% 100.0% 0.000.667 1.000 6/30/2009 Series A Funding Series A Post-Money Preferred Total 1.667 416.0% 0.0% 0.000 4.000.000 0 0 0 1.40 1.000.0% 100.000 Total 1. Pro Forma Cap Table Start-up Capitalization Founders Options Granted Options Available Investor 1 Investor 2 Investor 3 Total Pre-Money Valuation Price / Share Total $ Invested Post-Money Valuation Date Common 1.0% 0.0% 25.000 2.0% New Options 250. Note the lower price per share despite same pre-money valuation due to the new options.0% 0.400.666.000 0 0 0 0 0 1.0% $ 2. This values the pre-money company prior to options at $2.0% Including options in the pre-money calculation is very common in term sheets.0% 20.000 True Pre-Money: Series A Investment % 80.000. .0% 0.250.

250.0% 0.000.0% 0.000 6/30/2009 Series A Funding Series A Post-Money Preferred Total 1.000 $ $ $ $ 1.0% 0.000 411.000.000 New Option Pool Pre-Money Total 1.0% 15.40 1.433 731.000 182.667 New Options 60.000.7% 0.000.000.000.0% 100.0% 15.000 0 250.000 Total 1.000.000 4.833 2.000.119.000 0 161.000.0% % Preferred 0.827.0% 0.0% 0.9% 0.000.0% 100.5% 22.000 5.000.000 1.000.0% 0.0% 0.0% 9.000 % 100.0% 100.0% 0.1% 54.000 True Pre-Money: Series A Investment % 80.9% 26.0% $ 2.767 599.000.741.0% 100.NewCo Inc.5% 0.000 15.000 0 0 0 0 0 1.0% 22.666.000.0% 0.000.0% 21.0% 25.0% 20. This is important for voting rights.0% True Pre-Money: $ Series B Investment % 54.000 1.000. .000 $ $ $ $ 10.400.000 0 0 0 1.0% 0.095 $ $ $ $ 1.000 416.000 6/30/2010 Series B Funding Series B Post-Money Preferred Total 1.0% 0.0% 0.0% 0.000 250.000 5.7% 0.0% 0.000.47 5.000 2.0% 100.667 % New Option Pool Pre-Money Total 1.0% New Options 250.067 913.0% Note who controls a majority of Preferred.000.667 416.0% 100.667 0 0 161.667 416.000 250.000 411.0% 45.067 731.000 1.500 FD % 36.000 4.000 $ $ $ $ 3.0% 0.8% 0.000.000 416. Pro Forma Cap Table Start-up Capitalization Founders Options Granted Options Available Investor 1 Investor 2 Investor 3 Total Pre-Money Valuation Price / Share Total $ Invested Post-Money Valuation Date Common 1.667 1.

0% $ 1.000 411.067 913.827.000 6/30/2009 Total Preferences $ Remaining Common Proceeds $ Common Proceeds Series B Series A Common Options Total Total Proceeds Series B Series A Common Options Total Multiple of Cost Series B Series A Check if Proceeds are above Preference: Series B Series A Shares 913.000.833 416.000 4.0% $ - $ 5.0% Exit Waterfall High Scenario $ 100.793 100.9% 0.000 $ $ $ $ 10.000.47 Shares 913.000 $ $ $ $ $ 1.NewCo Inc. B does not participate in Common proceeds.38 6/30/2011 Value per share if everyone converted to comon.0% 0.48 36.000 5.000 $ 7.000 $ 36.000.250.0% 100.5% 15.138 12.000.83 3.48 36.000 A/B convert to common and participate in Common proceeds.842 3.000.2x 1.0% 0.000.0% 0.000 1.000.5% 0.000 5.7% 0.0% 0.400.000.0% 15.0% $ 2.333 15.382 14.000 250.000.000.833 $ 0% $ $ 5.667 Lower than preferences of B but higher than A.40 1.0% 45.0% 0.000.500 % 36.333.0% 0.000 $ 1.991.48 % of Proceeds 33.000 1.000 Total 1.000 6/30/2010 Series B Funding Series B Post-Money Preferred Total 1.000.667 1.000 6.7% $ 13. Pro Forma Cap Table Start-up Capitalization Founders Options Granted Options Available Investor 1 Investor 2 Investor 3 Total Common 1.000. Per Share 5.000.000 411.000 4.0% 0.000.0% $ 100.000.000 % 100.741.000 416.000.40 1 5.000.000 $ $ 5.0% 0.2% 36.574.40 416.0% 0.000 $ $ $ $ 1.0% 20.000 $ 1.7x 15.000 15.492 36.000 416.000.000 1.000 $ $ - $ - 1.667 0% $ $ 2.667 1.667 416.47 0 913.0% 0.767 599.000 0 161.000.0% 100.000.3% $ 15.47 5.0% 0.8% 54.0% 100.595.500 % of Proceeds 33.000 1.020 $ 36.000 6/30/2009 Series A Funding Series A Post-Money Preferred Total 1.666.1% 54.000.667 New Options 60.000.0% 100.667 0 0 161.40 1 Date 5.0% 0.119.000.000 1.574.000.000.48 6/30/2011 Exit Value Value Per Share (as-converted basis) Exit Date Liquidation Preferences Series B 1x Straight Preferred Series B Dividend Total Series B Preference Convert to Common? Date Series A 1x Straight Preferred Series A Dividend Total Series A Preference Convert to Common? Dividend $ 6/30/2010 6/30/2009 Per Share 5.020 1.667 - 416. . Important check to make sure investor proceeds are greater than or equal to their preferences.9% $ 5.7% 22.667 % New Option Pool Pre-Money Total 1.0% $ 14. A converts to common.333.382 $ $ $ 5.000.000 $ 3.000.2% $ 36.3% 15.833 2.000 0 0 0 0 0 1.8% 0.47 1 913.333 15.000.000 $ $ $ $ 3.0% New Options 250.741.000 411.827.0% Dividend $ 6/30/2010 $ Low Scenario $ 12.000 New Option Pool Pre-Money Total 1.1% $ 100.0% 100.000 $ $ - $ $ $ $ $ 33.476.9% 26.830.476.7% 0.433 731. Note it is greater than preferences of A and B.667 0% $ $ 2.000.000.0% 21.198.0% Series B Investment % 54.000.000 $ $ 5.5% $ 33.0% 100.833 $ 2.793 100.5% 22.0% % Preferred 0.991.0% 22.138 7.667 416.0% 0.48 15.0% 0.83 13.000.000 1.0% 25.83 41.000 Shares 416.833 $ 2. % of Proceeds 0.6x OK OK OK OK B exercises preference .5% 100.067 731.000. $ 5.000 182.000.198.0% 15.595.0x 1.000 0 0 0 1.0% 100. Important criteria of how well the investment performed.40 416.833 $ 0% $ $ 5.000 100.000 True Pre-Money: Pre-Money Valuation Price / Share Total $ Invested Post-Money Valuation Date Series A Investment % 80.000 250.000 411.000 2.000 0 250.0% True Pre-Money: $ 9.000. VCs typically aim for 4-10x returns.47 3.000.095 $ $ $ $ 1.3% $ 31.492 36.47 Shares 913.830.667 1.667 - 416.000.000 $ $ $ Per Share 36.000 2.000.000 $ 4.842 3.0% 0.0% 22.000.

0% 0.0% 0.333.65 14.425 7.000. $ 34.000 5.827.000 416.9% $ 21.667 0% $ $ 2.7% $ 36.000.47 0 913. $ $ $ Per Share 40.0% 0.652.000.3% 15.0% 0.000 6/30/2010 Series B Funding Series B Post-Money Preferred Total 1.000 $ $ $ $ 10.0% .0% 0.894 2.0% $ $ $ $ $ 31.0% $ 14.3% 15.000 $ $ $ $ 3.667 1.000 7.0% 0.000 Dividend $ 6/30/2010 6/30/2009 $ - Per Share 5.666.0% 0.000.5x 1.000 411.000.0% 0.000 6/30/2009 Series A Funding Series A Post-Money Preferred Total 1.4% $ 34.0% 100.000.333. the more effect participation has.1% $ 8.000 416.000.553.0% 25.000.000.833 $ 0% $ $ 5.5% 22.425 12.2% 36.000 411.000.7% $ 14.47 Shares 913.500 % 36.000.8% 0.55 8.000.347 1.48 6/30/2011 Exit Value Value Per Share (as-converted basis) Exit Date Liquidation Preferences Series B Full Participation Date Series B Dividend Total Series B Preference Convert to Common? 6/30/2010 $ Series A 1x Straight Preferred Series A Dividend Total Series A Preference Convert to Common? Dividend 6/30/2009 Per Share 5.000 Total 1.000 411.000.000.000.02 2.667 14.433 731.333 1.500 % of Proceeds 33.438. effectively "double dipping".000.47 Shares 913.000 2.000.000 $ $ $ 5.000 0 250.000 1.000.767 599.063. participation doesnt matter as much.7% 0.2% 36.667 416.000 2.063.000 0 161.400.000 182.833 416.40 1.500 % of Proceeds 33.000.667 1.667 - 416.833 $ 0% $ $ 5.0% 0.000 New Option Pool Pre-Money Total 1.0% $ $ $ $ $ 2.667 14.666.666.636.652.000 1.000 $ - Total Preferences $ 5.000.000.3x 14.40 416.364 In a big exit.5% 0.000 % 100.0% 100.000 $ $ $ Per Share 8.000.000.242.000 5.067 731.000 1.1% 54.000 0 0 0 1.000 0 0 0 0 0 1.667 0% $ $ 2.894 2.0% True Pre-Money: $ 9.47 5.000.667 - 416.568 34.0% 0.347 $ 2.203 95.7% 0.049.65 % of Proceeds 36.000 2.9% 0.000.438.000 Remaining Common Proceeds $ 95. Pro Forma Cap Table Start-up Capitalization Founders Options Granted Options Available Investor 1 Investor 2 Investor 3 Total Common 1.5% 15.000.000.000 $ $ 8.0% % Preferred 0.12 34.0% 15.0% 0.049.000 4.553.40 1 5.40 416.000 $ 1.47 0 913.000.0% 100.000.0% Series B Investment % 54.40 1 Date 5.5% 15.0% 21.667 416.000 250.250.000 15.000.000 $ 7.9% 26.0% 100.000.0% 0.0% 45.000 $ $ $ $ 1.0% 0.000 411.333 1.000 $ $ 5.000.38 6/30/2011 $ 5.667 % New Option Pool Pre-Money Total 1. Shares 913.0% New Options 250.000 $ 1.55 2.568 34.833 $ 2.833 $ 2.NewCo Inc.562 14.000 Investor receives preference and participates in Common.2% $ 100.667 0 0 161.000 1.0% 0.364 13.1x OK OK OK OK $ $ $ $ 1.095 Exit Waterfall High Scenario $ 100.067 913.0% 15. The smaller the exit.667 1.741.000 4.242.000.562 Percentage of proceeds is an important way investors look at ownership.0% 0.000 True Pre-Money: Pre-Money Valuation Price / Share Total $ Invested Post-Money Valuation Date Series A Investment % 80.0% 100.0% 100.000 250.0% 20.0% 22.0% 100.833 416.000.4x 1.0% $ 2.000 $ 4.741.55 % of Proceeds 61.0% 100.7% $ 100.0% $ 1.000.000 $ 36.000.000 1.000 $ $ Low Scenario $ 12.000.000.3% $ 7.636.000 $ 5.203 100.119.000 $ $ 5.000.000.000 Common Proceeds Series B Series A Common Options Total Total Proceeds Series B Series A Common Options Total Series B Effective Pre-Money Valuation Effective Post-Money Valuation Multiple of Cost Series B Series A Check if Proceeds are above Preference: Series B Series A Shares 913.833 2.65 34.741.000.667 New Options 60.