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John Thompson, CEO of NewVenture,Inc. seeks to raise $5 million in equity for his early stage venture in January 2024. NewVenture is a subscription-based software
John Thompson, CEO of NewVenture,Inc. seeks to raise $5 million in equity for his early stage venture in January 2024. NewVenture is a subscription-based software company that has experienced 75% revenue growth over the last year. The company generated $2.5 million of revenue in 2023, with an operating loss pf $450,000. Thompson projects that NewVenture will achieve $30 million in revenue by 2028 (with a constant growth rate in the next 5 years), followed by 5 years of 35% revenue growth (2029-2033), and 3% growth thereafter (2034 and onwards). He also estimates that company will remain unprofitable until 2028, with EBIT margins of -10% on average over the next 5 years (2024-2028), growing over time to an average of 5% in years 6-10 (2029-2033), and 10% thereafter (2034 and onwards). TheNewVenturehas1,000,000totalsharesoutstandingbeforetheinvestment.How many new shares should she purchase, and at what share price
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