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8. StartCo is an early stage company whose financial plans call for the company to be sold in 5 years, at a valuation of $10
8. StartCo is an early stage company whose financial plans call for the company to be sold in 5 years, at a valuation of $10 million. You are considering an investment of $100,000 in StartCo. You like the company but feel that it is a fairly risky venture, so you want a 40% annual return on your investment. What is the present value of StartCo, using your required rate of return as the discount rate? Note: This will calculate the pre-money valuation for StartCo. a. b. What % of the company would you expect to receive for your $100,000? Note: You need to use the post-money valuation for this calculation. c. If there are 750,000 shares of StartCo already outstanding, out of 10 million shares authorized, how many shares will there be after you invest your $100,000? d. How many shares will you be purchasing, and at what price
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