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Dino-Fi has been approached by a Venture Capital investor, that would like to invest $500,000 into Dino-Fi. The CEO is interested in this opportunity because

Dino-Fi has been approached by a Venture Capital investor, that would like to invest $500,000 into Dino-Fi. The CEO is interested in this opportunity because it would help the company skip a step in his mind, by alleviating the need for the business to raise $200,000 from Angel investors before approaching a VC. The CEO is preparing for the term sheet negotiations and wants to know how much ownership he should be willing to give up to secure an equity investment of $500,000. Projections show that Dino-Fi could be worth $10,000,000 in 5 years, and you suspect that the VCs hurdle rate for an investment of this size and nature would be 35%. How much company ownership should Richard be willing to give up for the $500,000 investment?

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