Part 1 (ch24) Questions Numeric
Type your answers with “.” instead of “,”! For numerical answers, use 2 decimal places. For instance, if your answer is 0.12345 or 12.345%, type, “12.34” in the box.
Question 1
You founded your own firm two years ago. Initially, you contributed 0.054 million of your money and, in return, received 1 million shares of stock. Since then, you have sold an additional 0.75 million shares to angel investors. You are now considering raising even more capital from a venture capitalist. The venture capitalist has agreed to invest 3 million and receive 2 million shares. Assuming that this is the venture capitalist’s first investment in your company.
What is the post-money valuation, in million?
Assuming that this is the venture capitalist’s first investment in your company, what percentage of the firm will he or she end up owning?
What percentage will you own?
What is the value of your shares, in million?
Answers:
5.625
53.333
26.667
1.5
Question 2
Q: A company has raised capital as follows (in millions USD).
Series A Pre-Money: 2.803 & Series A Post-Money: 4.469
Series B Pre-Money: 51.534 & Series B Post-Money: 88.187
Series C Pre-Money: 139.14 & Series C Post-Money: 208.693
How much did the company raised in each round, in millions?
Round A: , Round B: , Round C:
Assuming no other securities were issued, what fraction of the firm’s shares were held by common shareholders (founders and employees) after each round, in percent?
Round A: , Round B: , Round C:
Answers:
Round A: 4.469 - 2.803 = 1.666
Round B: 88.187 - 51.534 = 36.653
Round C: 208.693 - 139.14 =69.553
Round A: 2.803 / 4.469 = 62.721
Round B: 51.534 / 88.187 * 2.803 / 4.469 = 36.652
Round C: 139.14 / 208.693 * 2.803 / 4.469 * 51.534 / 88.187 = 24.437