Analysis of UnBlockAfrica's Venture Finance and Board of Directors

This assignment solution analyzes the venture finance aspects of UnBlockAfrica, focusing on term sheets and the selection of board members. The analysis begins with an evaluation of three different term sheet options, considering factors such as equity allocation, the size of the stock option pool, dividend structures, and founder/employee vesting. The author provides a detailed rationale for choosing the most beneficial option, emphasizing the trade-offs and criteria used in the recommendation. The second part of the assignment delves into the selection of appropriate board members, reviewing the provided biographies of potential directors, including lead and syndicate investors, and independent directors. The author suggests suitable candidates for the board of directors based on their experience and how their skills align with the needs of UnBlockAfrica. The analysis considers the candidate's backgrounds and how their expertise can contribute to the company's success, particularly in areas like finance, social responsibility, and innovation.

Running head: VENTURE FINANCE
VENTURE FINANCE
Name of the Student:
Name of the University:
Author Note:

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Venture Finance
Table of Contents
Answer to question 1:......................................................................................................................2
Answer to question 2:......................................................................................................................4

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Venture Finance
Answer to question 1:
For UnBlockAfrica
UnBlockAfrica has offered the best proposal to the customers because the price per share is very
low as per the services they are offering. This company has three types of securities available
and they Series A convertible preferred shares, Series A convertible note and Series A
participating preferred shares among which the participating preferred shares was the most
profitable proposal for the company as well as for the investors. For every series the company is
offering the same rate of per share price.
 Equity: here also term sheet 3 will be best suitable which is series A participating
preferred shares. Per share price is similar like other terms. Here also the capital structure
will consists 45% of the existing shareholders. This ratio will not provide full control I
the hands of shareholders so that operation of the company goes without the intervention
of shareholder’s opinion. The capital structure includes employee stock option share up
to 10% and rest of the portion is dived into 30% for VC1 and 15% for VC2. This ensures
the ownership of the company stays with the original executives and it is not totally
provided in any others hand.
 Size of stock option pool: 45% of the VC shares helps the company to use the amount in
their relevant times. 1.5 times of the original share will be provided as liquidation, helps
the company to grow and the shareholders to get more than their original price of shares.
 Dividends: 8% of the non-cumulative will help the company to utilize the extra amount
for the betterment of themselves and pay more dividends to the existing shareholders
later. Similar to other terms, here also the preferred stock will have standard broad-based

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Venture Finance
weighted average anti-dilution rights. This anti-dilution right helps the company to
engage the extra money they will earn in the next financial year in the betterment of the
company so that existing shareholders of the company can earn more profit from the
investment.
 Founder and employee vesting: every shareholder will be provided with one voting right.
There will be five directors and three of them will be appointed by the shareholders as
their representative in the board meeting. Each of the shareholders will have 2 years of
vesting beginning.
In this company, term 3 will be more beneficial for them as well as for the shareholders
too because if the company earn ore then the shareholders will also earn more and this will
improve the market position for the company. The voting right provided to the preferred
shareholders is 1 voting right and that is similar to every other company. Five directors will help
the company to get a rational point of view on every decision the board makes.

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Venture Finance
Answer to question 2:
For UnBlockAfrica
From the investors, the syndicate investor that is Mr. Siyathemba Ndebele would be a
perfect for one of the position in board of directors. He has 18 years of practical experience in
finance industry and he has worked with many NGOs which will help him to take any decision
for society’s betterment as well. Ndebele’s undergraduate degree in political science and social
work will provide a theoretical as well as practical help to the company while any kind of
complicated decision as how it will impact the society and the company together. It is important
for every company to show some responsibility towards the society where they are working for
profit. Ndebele is also completing his second undergraduate degree in finance which will
definitely help the company to get advices over any finance related issues and queries. This will
help UnBlockAfrica to improve their CSR activities and make relevant decisions. Among the
three independent directors, Rachel Wu would be the best choice for UnBlokAfrica to choose as
one of the board of directors because she has two undergraduate degrees along with a practical
knowledge of the financial market. She was a co-founder of an application which reveals her
innovative idea. This will be really helpful for UnBlockAfrica in introducing a new product in
market. Rachel’s knowledge over the political science will also help the company get a better
point of view over how a product will affect the political ground of the society and how political
help can be gathered. Both Rachel and Ndebele have undergraduate degree in political science
hence, the company can have a strong knowledge base over this matter and they will help the
company to think for the customers and earn profit.

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Venture Finance