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Module5-VCReturnTemplate.xlsxVC Return Homework
| Value given in problem | ||||||||
| Formula/Calculation/Analysis required | ||||||||
| Accel Growth Fund IRR on Equity Investment | ||||||||
| Series E preferred stock | ||||||||
| Equity Value Year 0 | $20,000,000 | |||||||
| Shares | 2,932,553 | |||||||
| Price at Issue | ||||||||
| Class A Common Stock | ||||||||
| Conversion ratio | 12 | |||||||
| Converted Shares | ||||||||
| IPO Price Nov. 4, 2011 | ||||||||
| Equity Value Year 2 | ||||||||
| IRR | ||||||||
In November 2009, Accel Growth Fund invested $20 million in Groupon by buying 2,932,553 shares of Series E convertible preferred stock. What was the realized IRR of this investment, if the fund sold at IPO and "each share of Series E preferred stock was converted into 12 shares of Class A common stock on October 31, 2011" (Amendment No. 8 to form S-1, filed with SEC on November 2, 2011, page II-3)? To find the IPO price, you should download Groupon’s IPO prospectus (form 424B4) from Edgar or other sources.
