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1) A new Internet company anticipates which will require $30 million in venture capital to obtain the $1 billion terminal value in 7 years.

Suppose that this company is a seed-stage company with no prior investors, what annualized return are investors anticipating?

Next, suppose that founder wants the venture capitalist to invest $30 million of venture capital in 3 rounds of $10 million at Time 0, Time 1, and Time 2, and with a Time 7 exit value of $1 billion. Founder anticipates returns of 85%, 60%, and 40% for rounds 1, 2, and 3, respectively. What percentage of ownership is sold in each of three rounds? What's the founder ownership percentage at Time 7?

Suppose that founder has= 25,000 shares, how many shares must be issued in first 3 rounds?

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M915069

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