Question
May I get help for only part 4 & 5 of the question please? Thank you. Delta Games Private Limited is a digital gaming company
May I get help for only part 4 & 5 of the question please? Thank you.
Delta Games Private Limited is a digital gaming company creating fun-to-play games for millenials. Your firm is expecting to make a Series-A investment of $5 Mn in the Delta. Your firm's expected rate of return is 40% for a comparable investment.
Before your investment, Delta's ownership is as follows: Founders: 50%, Seed Ventures: 50%, and it has 1,000,000 shares outstanding.
This year. Gamma Games, a competitor of Delta had a PAT of $20 Mn, and was sold for $200 Mn. You should expect Delta to achieve an exit in Year 5 in similar proportions. In Year 5, Delta is expected to generate a PAT of $10 Mn.
You expect no further capital raise to be done by Delta to achieve an exit in 5 years.
- 1 .Calculate the expected value of your firm's investment in 5 years and the stake that your firm must own in Delta
- 2.Calculate the number of shares to be issued in Series A and the per-share issuance price
- 3.Calculate the Pre-Money and Post-Money Equity Valuation that your firm should be willing to offer for Delta
- Calculate the number of shares issued, issuance price and pre-money and post-money valuation in Series B
- Calculate the number of shares issued, issuance price and pre-money and post-money valuation in Series A
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