A young entrepreneur has developed a prototype of a digital application. Scaling up the products visibility requires initial and later stage financing. After an initial discussion with a well known venture capital firm known for financing similar start ups, the following numbers are worked out. The startup would require an initial funding of $3.5 million and year zero. The company expects to earn $2.5 million in year 5, the year where it also wants to realize the terminal value of the business. The company also expects a comparable price earnings ratio of 15 in year 5. The venture capital firm demands a rate of return of 50% on their investments. Further investigations show that the initial funding would not be sufficient to realize the exit value of the business. An additional $1million would be required in year 2 that would be brought in by second round investors and another $1million would be brought in year 4 by the third round investors. The second and third round investors assume a 40% and 25% risks in the business respectively. The entrepreneurs would like to keep a million shares with them. Estimate the following:

Post and pre money value at each stage

The final shareholding of all the stake holders

The price per share at the end of each round of investing

How would the values change in the initial investment required is $1.5 million

PLEASE DO THE calculation IN EXCEL FORMAT