What is the payoff to edwin the entrepreneur

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Larry (LP) invests $100,000 in a VC fund run by Gary (GP). Gary is under 2/20 compensation plan. Interest does not accrue on the dividends. Gary invests $100,000 in a firm run by Edwin (Entrepreneur). The pre-money value of Edwin's firm is $400,000. In five years, the firm sells for $4,000,000. Answer the following:

Problem a) What is the payoff to Edwin the Entrepreneur?

Problem b) What is the payoff to Gary the General Partner?

Problem c) What is the payoff to Larry the Limited Partner?

Reference no: EM132736837

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