Consider a start-up that is valued at cost throughout the early stages of its life. a. Round

Question:

Consider a start-up that is valued at cost throughout the early stages of its life.

a. Round A: Cyprus Ventures invests $250,000, bringing the post-round valuation to $800,000.

What are the ownership percentages for the founder and Cyprus Ventures, if all voting rights are equal?

b. Round B: A syndication of Cypress Ventures, Specific Pacific Management, and Mountainhome Capital Group invests $750,000 each. Now determine the ownership for each party assuming the start-up is valued at cost.

c. What would be the minimum necessary voting rights for the founders to maintain control through both rounds of financing? (Control is defined as greater than 50% ownership, with percentages rounded to whole numbers.)

 P-68

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

ISE Investments

ISBN: 9781266085963

13th International Edition

Authors: Zvi Bodie, Alex Kane, Alan Marcus

Question Posted: