Starware Software was founded last to year develop software for gaming applications. The founder initially invested $800,000 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 $1.40 million and wants to own 19% of the company after the investment is completed. How many new shares must be issued to the venture capitalist so the VC ends up with 19% of the company? What is the implied price per share of this funding round? Issue 1.12 million shares to VC, Implied share price of $0.93 Issue 1.52 million shares to VC, Implied share price of $0.72 Issue 2.35 million shares to VC, Implied share price of $0.60 Issue 1.90 million shares to VC, Implied share price of $0.80

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Please show all equations and work as needed. Make the correct answer clear. If possible, please type work so it can be copied. Thank you.

Starware Software was founded last
to
year
develop software for gaming applications. The
founder initially invested $800,000 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 $1.40
million and wants to own 19% of the company
after the investment is completed. How many
new shares must be issued to the venture
capitalist so the VC ends up with 19% of the
company? What is the implied price per share of
this funding round?
Issue 1.12 million shares to VC, Implied
share price of $0.93
Issue 1.52 million shares to VC, Implied
share price of $0.72
Issue 2.35 million shares to VC, Implied
share price of $0.60
Issue 1.90 million shares to VC, Implied
share price of $0.80
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Transcribed Image Text

Starware Software was founded last to year develop software for gaming applications. The founder initially invested $800,000 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 $1.40 million and wants to own 19% of the company after the investment is completed. How many new shares must be issued to the venture capitalist so the VC ends up with 19% of the company? What is the implied price per share of this funding round? Issue 1.12 million shares to VC, Implied share price of $0.93 Issue 1.52 million shares to VC, Implied share price of $0.72 Issue 2.35 million shares to VC, Implied share price of $0.60 Issue 1.90 million shares to VC, Implied share price of $0.80