Question
A founder owns 100% of her startup. She is offered an equity investment by a VC investor, accepts, and eventually, undergoes two more rounds of
A founder owns 100% of her startup. She is offered an equity investment by a VC investor, accepts, and eventually, undergoes two more rounds of financing, each time by another VC investor.
The financing events are as follows:
Round 1: VC investor 1 steps in with $0.5 million at a pre-money value of $2 million
Round 2: VC investor 2 contributes $3 million at a pre-money of $7 million
Round 3: VC investor 3 coughs up $5 million at a pre-money of $20 million.
At that point (Round 3), what is the worth in stock of the founder, of VC1, of VC2, and of VC3?
What percentage of the company does each own?
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