Calculate the percentage of ownership to be given to venture

Reference no: EM133369085

Question: A start-up company needs $2 Million funds to finance their growth. A venture capitalist approached the shareholders to provide them with the funds needed but the required return per year demanded is 40% for the next 5 years.

Estimated EBITDA of the firm for the current year is $200,000 which is expected to be increased by 30% per year. Estimated EBITDA multiple at the end of year 5 is 20 while the company expects to have $300,000 cash and no interest-bearing debt at that time.

Calculate:

The percentage of ownership to be given to venture capitalist
Post Money and Pre Money values

Reference no: EM133369085

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