As the CEO of a technology start

$-$

up venture, you are pitching your software company's seed round to a potential investor, who is a partner at a $

$4$

$5$

$0$

MM AUM

$($

assets under management

$)$

$$VC fund. According to your sales team, you have

$2$

$0$

$8$

$$users this year

$($

assume year

$1$

$)$

$$with each paying $

$1$

$4$

$9$

$.$

$9$

$9$

$/$

mo

$.$

$$for your software

$-$

as

$-$

a

$-$

service

$($

SaaS

$)$

$$product$.$

Recently, your CFO says your annual expenses are around $

$2$

$7$

$5$

k annually and projected to rise

$1$

$2$

$.$

$7$

$5$

$\%$

$$each year

$($

year on year increase

$)$

$.$

$$Good news is

$,$

$$your sales

$($

units of annual software licenses

$)$

$$will grow by

$2$

$0$

$\%$

$$in year

$2$

$,$

$$and

$3$

$0$

$\%$

$$on year

$3$

$$and by

$4$

$5$

$\%$

$$in year

$4$

$($

year on year throughout

$)$

$.$

$$More importantly, in year

$3$

$$and

$4$

$,$

$$you are improving the product and can charge customers $

$2$

$9$

$9$

$.$

$9$

$9$

$$per month.

Assuming

$4$

$-$

year projection time

$-$

horizon, what is:

$*$

$$Your gross burn

$($

in $

$)$

$$for each of the

$4$

$$years

$*$

$$Your profit margin

$($

in $ and

$\%$

$)$

$$for each of the

$4$

$$years

$*$

$$Assuming your industry average P

$/$

E ratio or multiplier, what is your terminal value

$($

$

$)$

$$for year

$4$

$$as an exit valuation?

Appendix

$$ARR multiplier Market cap

Medical equipment

$2$

$1$

$.$

$5$

$2$

$2$

B

Defense

$1$

$4$

$.$

$6$

$1$

$4$

B

Retail

$1$

$0$

$.$

$4$

$4$

$2$

$4$

B

Software

$1$

$1$

$.$

$7$

$5$

$5$

$5$

B

Energy

$1$

$8$

$.$

$7$

$2$

$1$

$3$

B

Write up of your rationale for the

$3$

$$answers above, as well as an excel sheet

$($

$.$

XLSX format

$)$

$$of your analyses with formulas.