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Trendsetter Final

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Running head: TRENDSETTER 1
Trendsetter, Inc.
Students Name
Institutional Affiliation

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TRENDSETTER 2
Trendsetter, Inc.
The term sheets presented in the two cases scenario by Alpha Ventures and Mega Fund
have significant differences in the terms of contract. Choice of the appropriate contract will
depend on the preferences that are appropriate to Wendy Borg and Jason Kushdog, the founders
of Trendsetter, Inc. The first difference in in the type of securities offered by the two capital
ventures. Alpha ventures offers two types of shares. The escrow shares and preferential shares
(series A convertible preferred stock). The series A preferred stock form the majority of the stock
that the venture offers, that is, 4,761,905. The shareholders under these categories are not eligible
to vote. However, there is provision for conversion of the shares into common stock thus making
a stockholder eligible to vote. Escrow shares are a small percentage, only 501,253. These shares
have a restriction on their use.
Trendsetter, Inc is limited from issuing the escrowed shares. The only condition that will
allow issue of these type of shares is when the company has failed to $500,000 in the fiscal year
2000. Mega fund on the other hand offers only one type of shares that is, the series A convertible
shares. These shares can be easily converted into common stock. The common stock form the
largest proportion of the stock offered by Mega fund that is, 4,500,000 in common stock. Unlike
Alpha ventures escrowed shares. Mega fund provides for reserved stock which has similar
conditions to that of the common stock when they are issued.
The second difference is in the liquidation process. Both share some few similarities, for
instance when a trendsetter gets into a merger. However, significant differences exist in the
contract terms sheets of the two ventures. In the case of a liquidation, alpha ventures proposes a
compensation policy that greatly favors the series a preferred more than the common stock. The
initial issuance price of the stock and any declared but unpaid dividends is given to the series a

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Running head: TRENDSETTER 1 Trendsetter, Inc. Students Name Institutional Affiliation TRENDSETTER 2 Trendsetter, Inc. The term sheets presented in the two cases scenario by Alpha Ventures and Mega Fund have significant differences in the terms of contract. Choice of the appropriate contract will depend on the preferences that are appropriate to Wendy Borg and Jason Kushdog, the founders of Trendsetter, Inc. The first difference in in the type of securities offered by the two capital ventures. Alpha ventures offers two types of shares. The escrow shares and preferential shares (series A convertible preferred stock). The series A preferred stock form the majority of the stock that the venture offers, that is, 4,761,905. The shareholders under these categories are not eligible to vote. However, there is provision for conversion of the shares into common stock thus making a stockholder ...
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I was having a hard time with this subject, and this was a great help.

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