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 share

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 share

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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You are an entrepreneur that founded your IT company three years ago. You invested $100.000 and received 5 million shares of series A stock. Your companyhas been through three additional rounds of financing: Round price number of shares b 0.5 1000000 c 2 500000 d 4 500000 1. What is the Pre-Money Valuation for the series D funding round?2. What is the Post- Money Valuation for the series D funding round?3. Considering that you own the 5 million shares of Serie A round what percentage of the firm you own after serie D round?
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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

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(answer the next 3 questions with the following information.) A fictitious VC firm, EBV, that is considering a series A investment in a start-up company named Newco. The terms specify that EBV invests $5 million for 5M shares into Newco, which currently has 10M shares allotted to employees and founders. Security structure is as follows: First pay [one] times the Original Purchase Price on each share of Series A Preferred. Thereafter, the Series A Preferred participates with the Common Stock pro rata on an as-converted basis. The liquidation return is capped at four times OPP. EBV has committed capital of $100M with 2% management fee. GP% is 10%. If the exit value is $72, how much is the distribution to the VC? O $32M O $27.3 O $24M O $10.7M

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