What is being assumed and is that necessarily so

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Reference no: EM132027464

Your text provides a simple methodology of valuing a venture before and after venture capital funding.

If Pre-Money, the venture generates $1 million of earnings capitalized at 20%, the Pre-Money venture is worth $5 million.

Then if $5 million is invested, the Post-Money venture is worth $10 million. What is being assumed? Is that necessarily so?

Reference no: EM132027464

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