a. How many shares must the venture capitalist receive to end up with 20% of the company? What is the implied price per share of this funding round? b. What will the value of the whole firm be after this investment (the post-money valuation)? Please proper explain and do not copy from Chegg. Otherwise i have to report the answer.
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- Benjamin Garcia’s start-up business is succeeding, but he needs $200,000 in additional funding to fund continued growth. Benjamin and an angel investor agree the business is worth $800,000 and the angel has agreed to invest the $200,000 that is needed. Benjamin presently owns all 40,000 shares in his business. What is a fair price per share and how many additional shares must Benjamin sell to the angel? Because the stock will be sold directly to an investor, there is no spread; the other flotation costs are insignificant.Assume you purchased ten shares of Roku during the companys IPO. Comment on why this might be a good investment. Consider factors such as what you expect to get from your investment, why you think Roku would become a publicly traded company, and what you think is the landscape of the industry Roku is in. What other factors might be relevant to your decision to invest in Roku?Starware Software was founded last year to develop software for gaming applications. The founder initially invested $900,000 and received 10 million shares of stock. Starware now needs to raise a second round of capital, and it has identified a venture capitalist who is interested in investing. This venture capitalist will invest $1.20 million and wants to own 39% of the company after the investment is completed. a. How many shares must the venture capitalist receive to end up with 39% of the company? What is the implied price per share of this funding round? b. What will the value of the whole firm be after this investment (the post-money valuation)?
- Starware Software was founded last year to develop software for gaming applications. The founder initially invested $900,000 and received 8 million shares of stock. Starware now needs to raise a second round of capital, and it has identified a venture capitalist who is interested in investing. This venture capitalist will invest $1.40 million and wants to own 12% of the company after the investment is completed. a. How many shares must the venture capitalist receive to end up with 12% of the company? What is the implied price per share of this funding round? b. What will the value of the whole firm be after this investment (the post-money valuation)?Ethelbert.com is a young software company owned by two entrepreneurs. It currently needs to raise $1,746,400 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 23,600 shares in the company and the two entrepreneurs will have combined holdings of 35,400 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?You have started a company and are in luck—a venture capitalist has offered to invest. You own 100% of the company with 4.56 million shares. The VC offers $1.03 million for 820,000 new shares. b. What is the post-money valuation? c. What fraction of the firm will you own after the investment?
- The startup management is looking to raise venture capital. The pre-money valuation is $10,000,000 with two co-founders holding 40% of the shares each and two investors holding 10% respectively. Now, the platform receives a venture capital injection of $10,000,000. Answer the following questions: i. What is the post-money valuation in $? ii. How much equity does each founder hold in % and $ after the capital injection? iii. How much equity does the venture capital firm hold in % and $ after the capital injection?You have started a company and are in luck—a venture capitalist has offered to invest. You own 100% of the company with 4.96 million shares. The VC offers $1.12 million for 820,000 new shares. a. What is the implied price per share? b. What is the post-money valuation? c. What fraction of the firm will you own after the investment?A financial services company is considering a new investment in a new technology platform for investment management. The company has identified a fintech startup that is seeking funding at a valuation of $5 million. The company expects to receive a dividend of $200,000 per year over a five year term and sells it equity stake at a valuation of $10 million. What is the expected return on investment if the financial services company invests $2 million in the fintech startup
- ABC Co. just completed an IPO with an investment back in a firm commitment basis. The firm issue 6 million shares of common stock and the underwriting fees were $2.46 per share. the offering price was $30.00 per share. How much money did the company receive; what was the net proceeds to the Firm?a. John Thompson, CEO of NewVenture, Inc., seeks to raise $5 million in a private placement of equity in his early stage venture. Thompson conservatively projects net income of $5 million in year five and knows that comparable companies trade at a price earnings ratio of 20X. What share of the company will a venture capitalist require today if her required rate of return is 50% per annum? b. If the company has 1,000,000 shares outstanding before the private placement, how many shares should the venture capitalist purchase? What price per share should she agree to pay if her required rate of return is 50%? (Note: Assume investment is in standard preferred stock with no dividends and a conversion rate to common of 1:1) c. John feels that he may need as much as $12 million in total outside financing to launch his new product. If he seeks to raise the full amount in this round, how much of his company will he have to give up? What price per share will the venture capitalist agree to pay if…A tech firm that has developed a new type of internet browser is planning an IPO of 7,000,000 shares of common stock. The investment banking house that is underwriting the IPO has presented the tech firm with two possible plans of action: Plan 1: An underwritten offer of $10.00 per share plus a fee of 6% of the gross proceeds. Plan 2: A best efforts offering at $10.25 per share. An underwriting commission of 2.4% plus $119,000 will be paid to the investment bank. The investment bank is expecting to sell 96% of the offering. What are the net proceeds to the tech firm if they choose Plan 1? (Do not round intermediate calculations. Round your answer to a whole number.)