The final scenario we've got to look at is where there is a non-participating preference with a one-time preference. So here what you have as an investor, the series A investor, you can either take the one-time preference, your initial invested money back, or you can just take your preferred stock and convert it into ordinary shares on a one for one basis, and just get a pro rata share of the company. Let's have a look at what would be the outcome if the series A investors did not convert their shares. The initial invested amounts would be exactly the same as we've had in our different scenarios, but at exits, if we don't convert as a series A investors, we just get our initial money back and the multiple on the invested capital will just be one. The co-founders get everything else that is left over, so they will get the a hundred million minus the amount that has gone to the series A investors that haven't converted. Let's lock onto that, which is the 15, and I need to multiply it by the ownership stake just looking at the two founders of 50%, so the multiple invested capital here will be fantastic for those two founders. If the series A investors just takes their initial money back. But in this scenario where the value of the investment has gone up, it will definitely make sense for the series A investors to convert into common stock. If the value of the investment had fallen, then the non-con conversion, just taking their initial money back is preferable because they get the money out before the founders get anything back. But in this scenario, we've achieved a good exit. We just need to, again, take the initial numbers and pull them down. As our starting points, our proceeds from exit here will just be on a pure pro-rata basis because in this second scenario, the series A investors have converted their participating preferred stock into ordinary shares. So the a hundred million is just shared on a pro-rata basis between these different investors and the multiple on invested capital is now better for the founders and worse for the series A investors than we've seen in any of the other scenarios.

I pulled all the numbers from the above calculations in this summary table, and we can see that for the founder, the full participation approach is the worst outcome because the series A investor gets the preferred payment and then participates in the remainder, whereas non-participation is the best outcome because there's no preferred payment here. If the shares are converted into ordinary shares. For the Series A investor, it goes other way round that the full participation is the best outcome because they get their preference payment and then participate fully in the rest. Whereas for the non-participation, they just share equally in the common shares of the company.