Question
1. Does company have a strong proposal? addressed the question about the management team raised in the last chapter 2. determine the value of the
1. Does company have a strong proposal? addressed the question about the management team raised in the last chapter
2. determine the value of the company in 20017 and the value today assuming a 30% discount rate. What is the value if the rate is 40%? What share of the company would an investor get for a $1,000,000 investment? Assume a market multiple of 8 to establish the value in 2017. How does this valuation compare to the valuation you performed in the last chapter using (DCF)? (Page-190 from the link provided) VC’s share =Investment /Present Value Terminal value = year 5 net income x market multiple
3. If company N has 1,000,000 shares outstanding, how many shares will an investor get for the $1,000,000 investment? What stock price is reflected in this valuation?
4. If an investor receives a 30% share of the company for $1,000,000 investment and accountant's projections hold true, what return on investment will that investor earn? Is that sufficient? At what stage is the company at this time?
5. Does company have the characteristics of a standard venture capital recipient?
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