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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.

  1. After the closing of the capital funding what was the post money valuation and the venture capitalists percentage of ownership.
  2. Presuming the company sells for $100,000,000.00 what would the venture capitalist receive in proceeds?
  3. Presuming the company sells for $27,000,000.00 what would the owners (company) receive in proceeds.
  4. 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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