Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Basic Finance Expert

An entrepreneur seeks $4 million from a venture capitalist. They agree that the entrepreneur's venture is currently worth $12 million and that, when the company goes public in an IPO three years hence, it will have an expected market capitalization of $70 million. Given the company's stage of development, the VC requires a 40% return on investment. What fraction of the firm will the VC receive in exchange for its $4 million investment?

Mini Case- Entrepreneurial Finance and Venture Capital

Through your financial services firm, Vestin Capital, Inc., you have raised a pool of money from clients. You intend to invest it in new business opportunities. To prepare for this endeavor, you decide to answer the following problems.

1. What are some of the challenges of financing entrepreneurial growth companies (EGCS)?

2. What are the different types of venture capital funds?

3. What are some choices for organizing a venture firm?

4. In what ways should a venture capital firm structure its investments?

5. Should venture capital firms use convertible securities?

6. What are some of the exit strategies that may be available to a venture capital firm?

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M939752

Have any Question? 


Related Questions in Basic Finance

Question 1 - bondsyou have just purchased 5 million par

Q UESTION 1 - B ONDS You have just purchased $5 million par amount of the 5yr and 30yr US Treasury bonds shown below, at the prices shown. (Assume all bonds are semi-annual compounding.)   Par Amt            Coupon       ...

If a company has a degree of financial leverage of 20 what

If a company has a degree of financial leverage of 2.0, what is the expected effect of a 2% increase in operating earnings to the earnings to owners? How may using debt financing increase the governance of a company? Exp ...

Now that tony has seen the quality of your work he is

Now that Tony has seen the quality of your work, he is considering promoting you into a financial analyst position. However, you must still prove your analytical skills. He specifically wants to know the following: • Do ...

Suppose a research conducts a two-factor study comparing

Suppose a research conducts a two-factor study comparing two treatments (I and II) for males versus females. The structure of the study is shown in the following matrix. Treatment I II Female Male a. If the results show ...

1 describe the basic types of regional trade agreements

1. Describe the basic types of regional trade agreements. Discuss some of the advantages and disadvantages of MNCs doing business in each type. 2. Discuss some of the implications (costs and benefits) of a common currenc ...

Kms corporation has assets with a market value of 500

KMS Corporation has assets with a market value of $500 million, $50 million of which are cash. It has debt of $200 million, and 10 million shares outstanding. Assume perfect capital markets. a. What is its current stock ...

Backgroundthe facebook group announced that it raised

Background The Facebook group announced that it raised between $10 million to $12 million in first-round financing led by Accel Partners on April 15, 2005. As a part of the transaction, Jim Beyers, a Managing Partner at ...

Abc inc just paid a dividend of 225 and the dividends are

ABC INC just paid a dividend of $2.25 and the dividends are expected to indefinitely grow at a constant 2.8% rate. If investors require a return of 11.8% from this stock, what is the value of the ABC stock? Write in the ...

Explain what we mean when we say that the binomial model is

Explain what we mean when we say that the binomial model is a discrete time model and the Black-Scholes-Merton model is a continuous time model? Explain the difference between a normal and a lognormal distribution as it ...

1 what makes a good theory why are theories so important in

1. What makes a good theory? Why are theories so important in behavioral research? 2. What makes a theory falsifiable? What makes a theory tautological? 3. What is a research hypothesis? Why are research hypotheses, rath ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro

Describe what you learned about the impact of economic

Describe what you learned about the impact of economic, social, and demographic trends affecting the US labor environmen