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 $$450$MM AUM $($assets under management$)$ VC fund. According to your sales team, you have $208$ users this year $($assume year $1)$ with each paying $$149\mathrm{.}99/$mo$.$ for your software$-$as$-$a$-$service $($SaaS$)$ product.

Recently, your CFO says your annual expenses are around $$275$k annually and projected to rise $12\mathrm{.}75\%$ each year $($year on year increase$).$ Good news is$,$ your sales $($units of annual software licenses$)$ will grow by $20\%$ in year $2,$ and $30\%$ on year $3$ and by $45\%$ in year $4($year on year throughout$).$ More importantly, in year $3$ and $4,$ you are improving the product and can charge customers $$299\mathrm{.}99$ per month.

Assuming $4-$year projection time$-$horizon, what is:

Your gross burn $($in $$)$ for each of the $4$ years $(6$ points$)$

Your profit margin $($in $ and $\%)$ for each of the $4$ years $(6$ points$)$

Assuming your industry average P$/$E ratio or multiplier, what is your terminal value $($$$)$ for year $4$ as an exit valuation? $(8$ points$)$

Hint: Review the $$perfect valuation model$$ in week $2$

Appendix

ARR multiplier

Market cap

Medical equipment

$21\mathrm{.}5$

$22$B

Defense

$14\mathrm{.}6$

$14$B

Retail

$10\mathrm{.}44$

$24$B

Software

$11\mathrm{.}75$

$55$B

Energy

$18\mathrm{.}72$

$13$B

Guidelines

To get full points, include a short $(<1$ page, double$-$spaced, $12$ pt Times New Roman in $.$DOC or $.$PDF format$)$ write up of your rationale for the $3$ answers above, as well as an excel sheet $(.$XLSX format$)$ of your analyses with formulas.