Answered step by step
Verified Expert Solution
Link Copied!
Question
1 Approved Answer

EBV has invested a $10M Series A investment in Newco. EBV estimates three possible outcomes with an expected exit time in 5 years with final

EBV has invested a $10M Series A investment in Newco. EBV estimates three possible outcomes with an expected exit time in 5 years with final ownership fraction of 5%. LPs expected rate of return is 10%. I. a 30 percent probability for a successful exit, with an exit valuation of $500M. II. a 20 percent probability of failure with $0 value. III. Redemption of original investment with 2x liquidation preference. What is the valuation for GPs?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image
Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_step_2

Step: 3

blur-text-image_step3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Management For Nurse Managers And Executives

Authors: Cheryl Jones, Steven A. Finkler, Christine T. Kovner

4th Edition

ISBN: 1455700886, 9781455700882

More Books

Students explore these related Finance questions