Typically, venture rounds are participating preferred securities (at least). So, the more likely scenario here is:
43.4 MM Sale
Less: 9.8 Cash Retention Pool
= 33.6 MM Available for Shareholders
Less: 17MM Preferred to VCs (Face Value of VC Investment)
= 16.6 MM (split among VCs, founders, employees)
>typically, venture rounds are participating preferred securities (at least)
That is increasingly false for A rounds, at least.
This 2 year old discussion talks about that, but from what I hear these days, any startup that doesn't "desperately" need money will not agree to participating preferred in the valley.
Yes, that is a good point. Some research suggests that today only ~35% of Valley Series A are part preferred(according to recent legal reports), but Crunchbase suggests that Loopt took series A in 2005, Series B in 2008 and Series C in 2010. Total capital raised (according to that post) was $32MM across 3 rounds. Not sure how much was primary or if any of it was taken out by later rounds, of course. Anyhow, I don't know for sure, but I suspect there were some protections around the securities, given the timing of the early rounds and the total amount invested. http://www.crunchbase.com/company/loopt
Less: 17MM Preferred to VCs (Face Value of VC Investment) = 16.6 MM (split among VCs, founders, employees)
VC Participating Share: ~35% * 16.6 = ~5MM
Available for Founders / Employees = 11MM
Total to VCs = 17+5=22MM