liquidation preference



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Assume an Investor who invested s100 million hold 15per cent in your co and has a 2x liquidation preference. if you sell your co for s2billion, how much will the investor get?

2 Answer(s)


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profit from the co. sold
=2x multiply by 0.15 x S2billion = 600million
600million - 100million( money invested)
=500million.
2x (0.15) x 100million = 30million
S500million - S30million = S470million
Investor will get S470million

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2x Liquidation Preference=2*100= 200m
15% of (2000-200) = 270m
Hence
200m+270= 470m