FIN650 Module 5 - VC Return Template-3-2

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.

S`F

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