A high growth company raised $10,000,000.00 in capital from a venture capital firm in the early growth stage of funding. The pre-money valuation of the company at the time the capital was raised $20,000,000.00. The terms of the investment also had an annual dividend of 8% and an exit preference of 1.2X upon a liquidity event. Based on these facts please answer the following questions. After the closing of the capital funding what was the post money valuation and the venture capitalist’s percentage of ownership. Presuming the company sells for $100,000,000.00 what would the venture capitalist receive in proceeds? Presuming the company sells for $27,000,000.00 what would the owners (company) receive in proceeds. Presuming the company sells for $100,000,000.00 but also has $10,000,000.00 of debt on the balance sheet, what will the owners receive in proceeds?

A high growth company raised $10,000,000.00 in capital from a venture capital firm in the early growth stage of funding. The pre-money valuation of the company at the time the capital was raised $20,000,000.00. The terms of the investment also had an annual dividend of 8% and an exit preference of 1.2X upon a liquidity event. Based on these facts please answer the following questions. After the closing of the capital funding what was the post money valuation and the venture capitalist’s percentage of ownership. Presuming the company sells for $100,000,000.00 what would the venture capitalist receive in proceeds? Presuming the company sells for $27,000,000.00 what would the owners (company) receive in proceeds. Presuming the company sells for $100,000,000.00 but also has $10,000,000.00 of debt on the balance sheet, what will the owners receive in proceeds?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter12: The Cost Of Capital

Section: Chapter Questions

Problem 17P

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A high growth company raised $10,000,000.00 in capital from a venture capital firm in the early growth stage of funding.The pre-money valuation of the company at the time the capital was raised $20,000,000.00.The terms of the investment also had an annual dividend of 8% and an exit preference of 1.2X upon a liquidity event.Based on these facts please answer the following questions. After the closing of the capital funding what was the post money valuation and the venture capitalist’s percentage of ownership. Presuming the company sells for $100,000,000.00 what would the venture capitalist receive in proceeds? Presuming the company sells for $27,000,000.00 what would the owners (company) receive in proceeds. Presuming the company sells for $100,000,000.00 but also has $10,000,000.00 of debt on the balance sheet, what will the owners receive in proceeds? this is based on the facts provided. there is no more information to give.
A high growth company raised $10,000,000.00 in capital from a venture capital firm in the early growth stage of funding. The pre-money valuation of the company at the time the capital was raised $20,000,000.00. The terms of the investment also had an annual dividend of 8% and an exit preference of 1.2X upon a liquidity event. Based on these facts please answer the following questions. Presuming the company sells for $100,000,000.00 but also has $10,000,000.00 of debt on the balance sheet, what will the owners receive in proceeds?
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