Assume that an investor cxpects 18X their investment into a company. Assume the post money exit valuation of a company is going to be $3.6 Million. Assume that the investor's investment into the company is going to be $130,000. Assume the company will likely have 14 employees at the point of the liquidation event. According to the investor's expectations, at the point when the investor invests their money, what proportion of the company will the investor own?

Assume that an investor cxpects 18X their investment into a company. Assume the post money exit valuation of a company is going to be $3.6 Million. Assume that the investor's investment into the company is going to be $130,000. Assume the company will likely have 14 employees at the point of the liquidation event. According to the investor's expectations, at the point when the investor invests their money, what proportion of the company will the investor own?

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Question

Assume that an investor expects 18X their investment into a company.
Assume the post money exit valuation of a company is going to be $3.6 Million.
Assume that the investor's investment into the company is going to be $130,000.
Assume the company will likely have 14 employees at the point of the liquidation event.
According to the investor's expectations, at the point when the investor invests their money,
what proportion of the company will the investor own?
O a. 3.6%
O b. 50.5%
Oc. 35%
O d. 65%
18%

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