Question

An option pool is used by founders to make payments to employees. The options grant the employees the right but not the obligation to buy shares of the companies shares at a set price before they expire. Using options conserves cash and ties the employee to the long-term success of the venture. True ○ False QUESTION 34 LYFT will offer 30,770,00 hares of Class A common Stock to the public during its IPO. O True False QUESTION 35 Venture capitalists rely on preferred stock in a company to skew investment returns in their favor relative to the owners of the common stock, gain a disproportionate level of control of key decisions relative to the common shareholders and ensure that their interests are aligned with the founders True OFalse QUESTION 36 The primary source of income for a general partner in a VC fund is the management fee the fund charges the limited partners. True False

Answer 1

Q.33 - True, primary goal of providing ESOP to employees in an early stage venture is to conserve cash and provide an incentive to work towards the success of the company and the stock options would be worth a lot more than it is at the early stage.

Multiple questions asked in single question, hence answered only one.