Question
5.A venture capitalist firm wants to invest $1.5 million in your NYDeli dot.com venture that you started six months ago.You do not expect to make
5.A venture capitalist firm wants to invest $1.5 million in your NYDeli dot.com venture that you started six months ago.You do not expect to make a profit until year four when your net income is expected to be $3 million.The common stock of BioSystems, a "comparable" firm, currently trades in the over-the-counter market at $30 per share.BioSystems' net income for the most recent year was $300,000 and the firm has 150,000 shares of common stock outstanding.What percentage of ownership of the NYDeli dot.com venture will you have to give up to the VC firm for its $1.5 million investment?
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