Problem: Venture Partners has evaluated an early-stage investment in a startup company (Startco). Startco needs $4 million in financing, and SPC has offered to provide the financing in exchange for a 40% interest in the company.
Required:
Question 1: What is SPC's post-money valuation of Startco?
Question 2: What is the pre-money valuation of Startco implicit in the deal terms offered by SPC Venture Partners?