Question
An investor offers you $839,123 in exchange for shares of your start-up company. The investor demands an annual rate of return of 65%, and expect
An investor offers you $839,123 in exchange for shares of your start-up company. The investor demands an annual rate of return of 65%, and expect that your IPO will be in 5 years. At that time you expect your firm to have annual income of around $1,806,424 dollars. A similar firm was recently acquired for $18,040,804 dollars. At the time of acquisition, their income was $1,939,713 million dollars per year. What percentage of your equity should you give to the investor? Enter your answer as a percentage, without decimals. For example, if your answer is 0.76543, that's 76.543%, which rounds to 77%.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started