1. Which type of equity provides a liquidation preference over common shares, ensuring shareholders are paid out first in case of a low or no harvest (Terminal Value)?

2. What is the purpose of "Floor Conversion" in a SAFE agreement? 

3. What does the term "Valuation Cap" in the context of SAFE agreements refer to?

4. What distinguishes Participating Preferred Shares from other types of  preferred equity?

5. Why do startups often use convertible notes or SAFEs for early-stage fundraising?

6. Angel Investor A (AIA) invested $10,000 into StartupX and received a convertible note with a 25% discount. A year later, Startup X raised a $3 million seed round at post-money valuation of $10 million. What valuation will AIA's note convert into equity?

7. Angel Investor A (AIA) invested $5000 in StartupX in exchange for a Safe Note with a $5MM Valuation Cap. A year later, StartupX raised a $2.5 million round at a pre-money valuation of $8 Million. The pre-money share price for the seed round was $10. What share price did AIA's investment convert into?

8. What is the primary purpose of equity vesting agreements for founders?

9. In the case of warrants, what gives the holder the right to purchase shares at a predetermined price?

10. What does a shareholder agreement (buy-sell agreement) among founders typically include?

11. Why is it recommended for founders to agree on the issuance of equity from the beginning?

12. Which event triggers the conversion of a SAFE into equity?

13. Stock options are primarily granted to:

14. What is one of the downsides of convertible notes and SAFEs for investors?

15. What happens to unvested equity if a founder leaves the company before the vesting period is over?

16. Syndicate Investor A (SIA) invested $250,000 into StartupX in the form of a SAFE with a valuation cap of $7 million and a floor conversion valuation of $3,000,000 ($7.50 per share). As part of the agreement, StartupX had to raise at least $2 million in a Qualified Round or the floor conversion would be triggered. StartupX failed to raise a qualified round, triggering the floor conversion. How many shares will SIA own following the conversion? 

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