A companys founders believe that their company can be sold for $60 million in four...
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A companys founders believe that their company can be sold for $60 million in four years. The company needs $6 million in capital now and $3 million in three years. The entrepreneurs want to hold 1 million shares. The venture capital firm uses a discount rate of 50% over all four years. (All information available)
1. Calculate the Post-Money valuation at the time of second round financing.
2. Calculate the Post-Money valuation at the time of first round financing.
3. Calculate the required fractional ownership for the second round investors.
4. Calculate the fractional ownership for the first round investors after dilution by the second round investors.
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