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Venture Capital

Ethelbert.com is a young software company owned by two entrepreneurs. It currently needs to raise $490,000 to support its expansion plans. A venture capitalist is prepared to provide the cash in return for a 40% holding in the company. Under the plans for the investment, the VC will hold 14,500 shares in the company and the two entrepreneurs will have combined holdings of 19,500 shares.

a. What is the total after-the-money valuation of the firm? (Enter your answer in dollars not millions.)

b. What value is the venture capitalist placing on each share?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M93051639

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