In February 2011 Scale Venture Partners (SVP) III acquired 503,056 shares of Series D

In February 2011 Scale Venture Partners (SVP) III acquired 503,056 shares of Series D
preferred stock for aggregate consideration of $1,590,613. In August 2012 the same fund
acquired 38,183 shares of Series E preferred stock for aggregate consideration of
$500,003. The stock never paid dividend. At IPO all preferred stock was converted to
common shares and in exchange for its preferred shares SVP III received 6,711,857
common shares. If SVP III sold shares at IPO, what its annualized return would be? Did
SVP III actually sell at IPO (support your answer by evidence)? If SVP III sold shares at
market closing on July 21, what its annualized return would be?

Series D
Investment date
Investment
Shares invested

2/1/2011
$1,590,613
503,056
Series E

Investment date
Investment
Shares invested

8/1/2012
$500,003
38,183

IPO Date
Number of common shares
IPO Price
Total Value
Second Date
Price
Total value

6,711,857

7/21/2015

Solution
CF

Solution using XIRR
Date

Return at IPO

CF

Solution using XIRR
Date

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Did SVP III actually sell at IPO? Support your answer by evidence

Value given in problem
Formula/Calculation/Analysis required
Qualitative analysis or Short answer