AVC offers you $500,000 for 10% of your firm. What is the pre-money valuation and post money! valuation of the firm? Post money valuation is $5,000,000 Premoney is $5,000,000 - $500,000 = $4,500,000 A strategic investor offers you $2,000,000 for 19.99% of your firm. (Assume 20%). What is the premoney and post money valuation of your company? Post money is $10,000,000 Premoney is $8,000,000 You are forming a startup and are reaching out to friends and family to invest money in your company. You circled up $500,000 and don't want to sell off more than 20% of your firm. You indicate that the $500,000 would purchase 20% of your firm. What is pre-money and post money valuation of your firm? Post money $2,500,000 Premoney $2,000,000 You want to purchase a high growth, cash flowing company for 5X EBITDA. Last year's EBITDA was $2,000,000. You want to purchase the firm with the help from a Private Equity company and continue to grow the revenue and EBITDA at 25% per year because the historical growth of these figures has been over 30% growth. You want to be conservative in our estimations. What would you purchase the company for? What would you sell the company for in 5 years assuming no EBITDA multiple expansion? Purchase the company -5x $2 million = $10,000,000 Purchase 5 x $2,000,000 $10,000,000 at time of purchase EBITDA after year after year after year after year after year 2,000,000 2,500,000 3,125,000 3,906,250 4,882.813 6,103,516 5 Sale price at end of year 5 $30,517,578 Note: EBITDA growth is assumed to be 25% per year