[MUSIC] Okay, let's talk about share price. So I already told you that two key economic terms so the term sheet, price per share, and liquidation preference. And the share price is determined by the ratio between the pre-money valuation of the company and pre-money shares outstanding. Pre-money valuation is what the investor is valuing before the investment. And shares outstanding is the sum of number of shares, plus stock options granted plus stock options not yet granted. Let's suppose that the venture capital cost you, I invest $5M at the valuation of $20M. Is it very clear to you? I think you should clarify by asking do you mean $20 million pre-money valuation? Because it's not clear if the valuation of $20 million is whether pre-money valuation or post-money valuation. Post-money valuation is the sum of pre-money valuation and amount invested. Let's talk about stock options, employee stock options. Stock option is the right to buy a certain number of shares of a company at a set price. This is called grant or exercise price over a certain period of time. And this period is called the exercise period. And venture capitalists want the company has sufficient stock options reserved to motivate its workforce. And also the company can use these stock options effectively when the company recruits a new employee. So a venture capitalist often asks option pool or employee pool is included in the share price calculation. And so let's look at these examples. First, two founders X and Y started ABC Company, and founder X has two million shares and Y are one million shares. And their share saw 66.7% for X and 33.3% for Y. And in series A funding, venture capital invests $2.5 million with a pre-money valuation of $10 million. And then this venture capitalist's share will be 20% from this relationship. And then the number of shares, the venture capital we get, is like this. Because before Series A, there are 3 million outstanding shares, if there's no sell options. And then X is the number of shares the venture capital will get for Series A funding, so when you solve this, x is 0.75 million or 750,000 shares. So the company issues new shares of 750,000. And the share price is 10 million, $3 million valuation divided by, [INAUDIBLE] Series A, number of shares, so it's $3.33. So after Series A, the Founders' share are reduced to these numbers. Now let's look at the second case. Venture Capital insists 20% option pool in this case, and with the same pre and post money valuation, $10 million and $12.5 million. And let's construct the cap table, capitalization table, after Series A. So it will look like this. We know that number of shares Founder X has is 2 million, and Founder Y, 1 million shares. An employee pool will be 20% after series A, and Venture capital, we get 20%, just like the case 1, and then we solve for this A, B, C, D and E. And we know the ratio between A and B, so we can get these numbers. And so we can easily get C, D, and E. In this case, the share of Founder X will be 40%, otherwise that share would be 20%, and preferred share price would be $2.5. So, in this case, we know that the pre-money valuation is $10 million, but if you exclude the option pool, the actual pre-money valuation is $7.5 million. And so the share price was also reduced to $2.5, from 3.33, in case 1. So in summary, we have considered the share price.