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If the VC's investment required return was 40% instead of 50%, what would his return be in dollar amount? PARAMETERS USING STAGED FINANCING Investor's investment
If the VC's investment required return was 40% instead of 50%, what would his return be in dollar amount?
PARAMETERS | |||||||
USING STAGED FINANCING | |||||||
Investor's investment | 2,000,000 | VC's investment - Stage 1 | 1,000,000 | ||||
Required return | 50% | Required required return | 50% | ||||
Number of years | 5 | Investor's return | |||||
VC's investment - Stage 2 | 1,000,000 | ||||||
Investor's return | 15,187,500 | Required return | 30% | ||||
Investor's return | |||||||
EBITDA in Year 5 | 6,000,000 | Total return | |||||
Excess cash | 300,000 | ||||||
Interest bearing debt | 3,000,000 | USING STAGED FINANCING | |||||
VC's investment - Stage 1 | 1,000,000 | ||||||
Multiple | 5 | Required required return | 50% | ||||
Enterprise value | 30,000,000 | Investor's return | 7,593,750 | 7,593,750 | |||
VC's investment - Stage 2 | 1,000,000 | ||||||
Equity in Year 5 | 27,300,000 | Required return | 30% | ||||
Investor's return | 2,197,000 | 2,197,000 | |||||
Total return | 9,790,750 | ||||||
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