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A high growth company raised $10,000,000.00 in capital from a venture capital firm in the early growth stage of funding. The pre-money valuation of the
A high growth company raised $10,000,000.00 in capital from a venture capital firm in the early growth stage of funding. The pre-money valuation of the company at the time the capital was raised $20,000,000.00. The terms of the investment also had an annual dividend of 8% and an exit preference of 1.2X upon a liquidity event. Based on these facts please answer the following questions.
- After the closing of the capital funding what was the post money valuation and the venture capitalists percentage of ownership.
- Presuming the company sells for $100,000,000.00 what would the venture capitalist receive in proceeds?
- Presuming the company sells for $27,000,000.00 what would the owners (company) receive in proceeds.
- Presuming the company sells for $100,000,000.00 but also has $10,000,000.00 of debt on the balance sheet, what will the owners receive in proceeds?
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