How many shares will the investor receive

Reference no: EM132078634

Question: Scenario where venture capital investment is spread over three rounds: $1,500,000 at t=0, 1,250,000 at t=2, and 750,000 at t = 4. Investors at t=0 require a 70% annual target return, investors at t=2 will demand a 50% annual target return, and investors at t=4 will require a 30% annual target return. The firm is expected to earn $6.25 million in year 5, and comparable firms have a P/E ratio of 18. There are 1 million shares owned by the founder and the VC investors will get new shares. Early investors anticipate the later investments.

What percentage of the final value of the firm does the round 1 investor require at t=5?

What percentage of the final value of the firm does the round 2 investor require at t=5?

What percentage of the final value of the firm does the round 3 investor require at t=5?

How many shares will the round 1 investor receive when the investment is made?

Reference no: EM132078634

Questions Cloud

How much will you have in twelve years : You are scheduled to receive $14,500 in three years. When you receive it, you will invest it for nine more years at 9.75 percent per year.

Identify the common law legal issues in dispute : LAWS20058 — AUSTRALIAN COMMERCIAL LAW - Identify the common law legal issues in dispute. What are the broad areas of contract law that are relevant here

What is amount of the firm net working capital : Scare Train,Inc has the following balance sheet statement ,items current liabilities of $818,139,net fixed and others assets of $1,516,470,total assets.

Find what amount should be used as the initial cash flow : SciTE Industries purchased a corner lot in five years ago at a cost of $641 thousand. The lot was recently appraised at $898 thousand.

How many shares will the investor receive : Scenario where venture capital investment is spread over three rounds: $1,500,000 at t=0, 1,250,000 at t=2, and 750,000 at t = 4. Investors at t=0 require.

Is there any exemption or postponement of the gain : Sayda. a single person, sold her personal residence for $689,000 on December 13. 2016. She had originally purchased the home in 2009 for $302,000.

Explain what a paradigm is : Social research allows us to look at the ambiguous and the unwritten and shed light on the incredibly complex issues that have yet to be written.

What are the potential payoff-losses for each alternative : Create a decision table in Excel QM. See video in Live Binder. What are the potential payoff/losses for each alternative and state of nature?

Identify one example of a large company : Using the Internet, identify one (1) example of a large company that has (or might be) engaged in anti-competitive behavior.

User Account

All Pages