GetHired is an early stage technology company that helps company hire employees through a platform that connects existing job websites and services into one service. It is currently unprofitable, but is expected to generate $25m of net income in 4 years. GetHired is also expected to go public in 4 years. It is planning to raise additional equity financing. It has no debt and does not plan to raise debt financing in the near future. You do some analysis of the firm and find that there are comparable firms listed on the ASX. Unfortunately you do not know precisely which comparable firm is a better match for GetHired: The tax rate is currently 30%. The risk-free rate is 3% while the expected market risk premium is 6%. Your VC fund plans to invest $10m into this startup. The GPs know from experience that they need to require higher returns on early-stage startups than their listed peers. They require a further 5% premium (per annum) to compensate for the lack of liquidity, 4.2% premium to counter founders' optimistic forecast and 2.6% premium for the need to work closely with founders and add value to the venture. 1. Calculate the expected return on equity for GetHired using information from the comparable firms. Make any assumptions that you consider necessary. 2. Calculate the pre and post money valuation of GetHired. How much ownership will the fund have post transaction? 3. As the first equity investor in the startup, your GPs worry that future rounds and option pools will affect their returns. If they estimate that approximately 40% more equity will be issued, calculate the new share price if there are currently 5,000,000 shares outstanding