Use the worked example of venture capital valuation provided in Exhibit 57.3 to answer the following.

a. Estimate the share of the co-founders, and the VC, based on Raghav’s assumptions, if there were only a single round of equity fundraising. If 100,000 shares were to be issued before approaching the VC, what share price would the VC be willing to pay? Hence, what would be the pre-money and post-money valuation of the company?

b. Suppose that the co-founders anticipate that there could be a second round of funding of Rs 4.5 crore after two years. Further, the second-round investors may expect a lower return of 25% if they perceive lesser risks after seeing business revenues. What should be the price of the shares in the first and the second round of funding?

c. What will be the advantage of using two rounds of funding instead of raising the combined amount of Rs 10.5 crore upfront?