a. How many shares must the venture capitalist receive to end up with 20% of the company? What is the implied price per share of this funding round? b. What will the value of the whole firm be after this investment (the post-money valuation)? Please proper explain and do not copy from Chegg. Otherwise i have to report the answer.
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- Starware Software was founded last year to develop software for gaming applications. The founder initially invested $800,000 and received 8.000 million shares of stock. Starware now needs to raise a second round of capital, and it has identified a venture capitalist who is interested in investing. This venture capitalist will invest $1.0 million and wants to own 20% of the company after the investment is completed. a. How many shares must the venture capitalist receive to end up with 20% of the company? What is the implied price per share of this funding round? b. What will the value of the whole firm be after this investment (the post-money valuation)? a. How many shares must the venture capitalist receive to end up with 20% of the company? What is the implied price per share of this funding round? The venture capitalist will receive million shares. (Round to three decimal places.)Help Save & Ex Chee Ethelbert.com is a young software company owned by two entrepreneurs. It currently needs to raise $918,400 to support its expansion plans. A venture capitalist is prepared to provide the cash in return for a 40% holding in the company. Under the plans for the investment, the VC will hold 16,400 shares in the company and the two entrepreneurs will have combined holdings of 24,600 shares. a. What is the total after-the-money valuation of the firm? (Enter your answer in dollars not millions.) Valuation of the firm b. What value is the venture capitalist placing on each share? Value of each share < Prev 2 of 8 Next m arch hp 寻Starware Software was founded last year to develop software for gaming applications. The founder initially invested $900,000 and received 10 million shares of stock. Starware now needs to raise a second round of capital, and it has identified a venture capitalist who is interested in investing. This venture capitalist will invest $1.20 million and wants to own 39% of the company after the investment is completed. a. How many shares must the venture capitalist receive to end up with 39% of the company? What is the implied price per share of this funding round? b. What will the value of the whole firm be after this investment (the post-money valuation)?
- Starware Software was founded last year to develop software for gaming applications. The founder initially invested $900,000 and received 8 million shares of stock. Starware now needs to raise a second round of capital, and it has identified a venture capitalist who is interested in investing. This venture capitalist will invest $1.40 million and wants to own 12% of the company after the investment is completed. a. How many shares must the venture capitalist receive to end up with 12% of the company? What is the implied price per share of this funding round? b. What will the value of the whole firm be after this investment (the post-money valuation)?The startup management is looking to raise venture capital. The pre-money valuation is $10,000,000 with two co-founders holding 40% of the shares each and two investors holding 10% respectively. Now, the platform receives a venture capital injection of $10,000,000. Answer the following questions: i. What is the post-money valuation in $? ii. How much equity does each founder hold in % and $ after the capital injection? iii. How much equity does the venture capital firm hold in % and $ after the capital injection?Starware Software was founded last year to develop software for gaming applications. The founder initially invested $700,000 and received 9 million shares of stock. Starware now needs to raise a second round of capital, and it has identified a venture capitalist who is interested in investing. This venture capitalist will invest $1.20 million and wants to own 13% of the company after the investment is completed. a. How many shares must the venture capitalist receive to end up with 13% of the company? What is the implied price per share of this funding round? b. What will the value of the whole firm be after this investment (the post-money valuation)? a. How many shares must the venture capitalist receive to end up with 13% of the company? The venture capitalists will receive million shares. (Round to three decimal places.)
- You have started a company and are in luck—a venture capitalist has offered to invest. You own 100% of the company with 4.56 million shares. The VC offers $1.03 million for 820,000 new shares. b. What is the post-money valuation? c. What fraction of the firm will you own after the investment?You have started a company and are in luck—a venture capitalist has offered to invest. You own 100% of the company with 4.96 million shares. The VC offers $1.12 million for 820,000 new shares. a. What is the implied price per share? b. What is the post-money valuation? c. What fraction of the firm will you own after the investment?A venture capitalist wants to estimate the value of a new venture. The venture is not expected to produce net income or earnings until the end of year 5 when the net income is estimated at $1,600,000. A publicly traded competitor or “comparable firm” has current earnings of $1,000,000 and a market capitalization value of $10,000,000. a.Estimate the value of the new venture at the end of year 5. Show your answer using both direct comparison method and the direct capitalization method. What assumption are you making when using the current price-to-earning relationship for the comparable firm?
- Ethelbert.com is a young software company owned by two entrepreneurs. It currently needs to raise $700,000 to support its expansion plans. A venture capitalist is prepared to provide the cash in return for a 40% holding in the company. Under the plans for the investment, the VC will hold 14,000 shares in the company and the two entrepreneurs will have combined holdings of 21,000 shares. a. What is the total after-the-money valuation of the firm? (Enter your answer in dollars not millions.) Valuation of the firm b. What value is the venture capitalist placing on each share? Value of each shareDelta Games Private Limited is a digital gaming company creating fun-to-play games for millenials. Your firm is expecting to make a Series-A investment of $5 Mn in the Delta. Your firm's expected rate of return is 40% for a comparable investment. Before your investment, Delta's ownership is as follows: Founders: 50%, Seed Ventures: 50%, and it has 1,000,000 shares outstanding. This year. Gamma Games, a competitor of Delta had a PAT of $20 Mn, and was sold for $200 Mn. You should expect Delta to achieve an exit in Year 5 in similar proportions. In Year 5, Delta is expected to generate a PAT of $10 Mn. You expect no further capital raise to be done by Delta to achieve an exit in 5 years. 1 .Calculate the expected value of your firm's investment in 5 years and the stake that your firm must own in Delta 2.Calculate the number of shares to be issued in Series A and the per-share issuance price 3.Calculate the Pre-Money and Post-Money Equity Valuation that your firm should be willing to…You are working for a venture capitalist (VC). The VC is interested in acquiring a one-third stake in a start-up. The total value (i.e., PV of future expected cash flows) of the start-up is one of $30M, $45M, $60M, $75M, $90M. The VC regards the five outcomes as equally likely. The start-up is currently wholly owned by its founder. The founder knows the details of the start-up's prospects, and so knows the start-up's total value. The founder needs liquid cash to cover personal expenses, and moreover is risk averse and would like to partially diversify. For these reasons, the founder values any offer from the VC at 50% more than the amount of the offer. For example: If the VC offers $10M for the one-third stake, the founder values this offer at $15M. Assume that if the founder is indifferent between accepting and rejecting an offer then the founder accepts. The VC seeks to maximize expected profits. What offer(s), if any, should the VC make? Show your work by filling out the following…
