Dr. Giles Montgomery, a mechanical professor, founded Blacksburg Battery Technology, Inc. (BBT) in January 2011. BBT was founded to develop and manufacture a new type of batteries for storing electricity generated by solar and wind energy. Dr. Montgomery invested $175,000 of his savings into the company, while the three graduate students each invested $2,000. Dr. Montgomery received 92.5% of the companys common equity, while each graduate student received 2.5%. The three graduate students received their equity at a discount because much of the lab work that was done to develop the companys technology was performed by them. The company also took out a $100,000 term loan from the First National Bank of Pulaski. The loan was used to purchase equipment, and the equipment served as collateral for the loan. The loan was also secured by personal guarantees from Dr. Montgomery and his wife. After six months, the three partners hired an accountant, two salespeople and five manufacturing employees. Together, these people received options for 5% of the companys common equity. In order to be able to exercise the options, each person had to work for the company for at least four years. By early 2012, the company needed additional funding. In April 2012, it raised $750,000 from a group of local angel investors, who received preferred stock that was convertible into 31% of the companys common equity. Three months later, the company received a $500,000 loan from the Shawsville Industrial Development Authority to buy equipment for a small manufacturing facility that would be located in the town of Shawsville. The company also hired 15 additional employees in July 2012, who were together given options for 3% of the companys common equity. A year after the angel investor funding, BBT raised $2.5 million of venture capital funding from Vawter Ventures Vawter Fund III, which purchased unsecured senior bonds convertible into 21% of BBTs companys common equity. Pritchard Ventures is the general partner of Pritchard Venture Fund IV. In July 2017, BBT went public in an IPO. In the IPO, the company sold new shares equivalent to 17% of its fully diluted common equity for $16.2 million. In addition to the new shares, some of the existing shareholders sold secondary shares. Dr. Montgomery, his three graduate students, the angel investors, and Vawter Fund III each sold 25% of their shares (after converting them). The employees who received options also sold 25% of the shares that they had received options to purchase. Virginia Securities served as the lead underwriter in the IPO and collected a 5% fee.

Question 2

How much money did Virginia Securities get paid for underwriting the IPO?