Form 4: Third Rock Ventures Converts Preferred Stock to Common Stock in Rapport Therapeutics IPO

Third Rock Ventures converted its holdings of Series A and Series B Preferred Stock into Common Stock of Rapport Therapeutics upon the closing of the company's initial public offering.

Summary

• Third Rock Ventures V, L.P. converted 6,551,449 shares of Series A Preferred Stock into Common Stock at a price of $0.00 on June 10, 2024.
• Following the transaction, Third Rock Ventures V, L.P. directly holds 7,135,233 shares of Common Stock.
• Third Rock Ventures VI, L.P. converted 969,218 shares of Series A Preferred Stock into Common Stock at a price of $0.00 on June 10, 2024.
• Following the transaction, Third Rock Ventures VI, L.P. indirectly holds 969,218 shares of Common Stock.
• The conversion occurred automatically upon the closing of Rapport Therapeutics' initial public offering (IPO).
• The conversion ratio was one share of Preferred Stock for 8.5648 shares of Common Stock.
• Third Rock Ventures V, L.P., Third Rock Ventures GP V, L.P., TRV GP V, LLC, Third Rock Ventures VI, L.P., Third Rock Ventures GP VI, L.P., and TRV GP VI, LLC are the reporting persons.
• Each reporting person disclaims beneficial ownership of the shares except to the extent of its pecuniary interest therein.

Sentiment

Score: 7

Explanation: The document reflects a standard financial transaction (conversion of stock) following an IPO, which is generally a positive event. The sentiment is neutral to slightly positive.

Positives

• The conversion to common stock simplifies the capital structure of Rapport Therapeutics.
• The IPO and subsequent conversion provide liquidity for Third Rock Ventures' investment.

Future Outlook

The document does not contain specific forward-looking statements about Rapport Therapeutics' future performance, but the conversion of preferred stock to common stock is a standard procedure following an IPO.

Industry Context

Venture capital firms like Third Rock Ventures often hold preferred stock in private companies, which converts to common stock upon a successful IPO. This is a typical part of the venture capital investment lifecycle.

Comparison to Industry Standards

• The conversion of preferred stock to common stock upon an IPO is a standard practice in the venture capital and biotech industries.
• Similar conversions occur when other venture-backed companies like Moderna, BioNTech, and CRISPR Therapeutics go public.
• The specific conversion ratio (1:8.5648) is unique to Rapport Therapeutics and reflects the terms negotiated during earlier funding rounds.

Key Dates