Susan starts an electric bicycle company with her savings of $200,000. Her new business is successful, and she attracts a $2 million investment from venture capital firm A at a post-money valuation of $5 million. Susan continues to grow her business and meets additional milestones. After seeing that the milestones have been met, venture capital firm A and a new venture capital firm, B, invests a combined $15 million into Susan’s electric bicycle firm at a post-money valuation of $40 million. What is Susan’s ownership of the firm after this investment?
Susan starts an electric bicycle company with her savings of $200,000. Her new business is successful, and she attracts a $2 million investment from venture capital firm A at a post-money valuation of $5 million. Susan continues to grow her business and meets additional milestones. After seeing that the milestones have been met, venture capital firm A and a new venture capital firm, B, invests a combined $15 million into Susan’s electric bicycle firm at a post-money valuation of $40 million. What is Susan’s ownership of the firm after this investment?
Chapter19: Deferred Compensation
Section: Chapter Questions
Problem 1RP
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Susan starts an electric bicycle company with her savings of $200,000. Her new business is successful, and she attracts a $2 million investment from venture capital firm A at a post-money valuation of $5 million. Susan continues to grow her business and meets additional milestones. After seeing that the milestones have been met, venture capital firm A and a new venture capital firm, B, invests a combined $15 million into Susan’s electric bicycle firm at a post-money valuation of $40 million. What is Susan’s ownership of the firm after this investment?
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