Private Equity Firms

Question 1

1. How are venture capital private equity structured? How are private equity firms compensated? Why may Khosla Ventures be motivated to push for Square to seek an exit?

2. What characteristics do the firms in case Exhibit 2 have in common? Do you agree with Marc Andressen’s thoughts regarding unicorn valuation levels? Why or why not?

3. What would the capitalization table look like after the series E issuance? What is the post-money valuation?

4. What returns would each class of investors realize if Square exited through an IPO rather than through a sale at valuations of $3 billion, $6 billion, or $9 billion? How would the returns change if the series E securities did not have the IPO ratchet?

5. Do you recommend investing in the series E preferred round?

Question 2

What is the CC in this case study? What are important questions to ask the patient to formulate the history of present illness and what did the patient tell you?

What components of the physical exam are important to review in this case? What are pertinent positive and negative physical exam findings to help you formulate your diagnosis?

Which differential diagnosis is to be considered with this case study? What was your final diagnosis?