Read: How Venture Capitalists Evaluate Potential Venture Opportunities 9-805-019 AccessLine Technologies is a telecommunication company that has already raised funds from other investors at a high valuation. It is now seeking $16 million in Round B financing. Apex Investment

Partners is a venture capital firm leading this financing round. One major area of discrepancy is the

valuation for AccessLine. Using a memorandum format, please answer the following questions. Please attach your spreadsheet

analysis to your memo. Also, please ignore the warrants in the Series A term sheet. Please consider the following questions:

a) Is AccessLine an attractive investment opportunity? Why or why not? What are the key risks

associated with the investment? b) How has AccessLine financed itself to date? Why have they chosen this strategy? What have

been the implications for the firm? Why is Dan Kranzler now considering raising funds from

Apex Investment Partners? c) How attractive are the terms that AccessLine has proposed to Apex for the Series B financing?

Does the deal structure adequately address the risks of the investment? What issues, if any should concern Apex?

d) Prepare a "water-fall" diagram for the proposed term sheet. How does it compare to the other term sheets that we've examined?