An entrepreneur seeks 4 million from a venture capitalist, Ask an Expert

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An entrepreneur seeks $4 million from a venture capitalist. They agree that the entrepreneur's venture is currently worth $12 million. When the company goes public in an IPO in three years, it is expected to have a market capitalization of $70 million.

Given the company's stage of development, the VC requires a 40 percent return on investment. What fraction of the firm will the VC receive in exchange for its $4 million investment?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92070212

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