Q3. Suppose you've started a business in Boulder, selling coolers of your imagination. Sales grew reasonably and one day you receive a call from a VC interested in investing in your startup (Series A round). Suppose you and the VC agree that your startup can generate $10 million in net income 6 years from today. Remembering the valuation exercise, you decide to propose an equity valuation to the VC, by using Yeti Cooler as a comparable firm. Below, you will see some information for Yeti in the last four quarters. You also think that the VC's target rate of return is 20% per year, and their retention ratio (due to subsequent equity rounds) would be 0.5. (a) Calculate the VC's percentage share of your firm's equity if they invest $10 million. Show your work. (b) What is the A round post-money valuation, and the pre-money valuation, respectively? From: 09/30/2019 To: 10/10/2020 50 Stock Price 20 10 TTM Net EPS 60 PE Ratio Dec Mar Jun Oct Q3. Suppose you've started a business in Boulder, selling coolers of your imagination. Sales grew reasonably and one day you receive a call from a VC interested in investing in your startup (Series A round). Suppose you and the VC agree that your startup can generate $10 million in net income 6 years from today. Remembering the valuation exercise, you decide to propose an equity valuation to the VC, by using Yeti Cooler as a comparable firm. Below, you will see some information for Yeti in the last four quarters. You also think that the VC's target rate of return is 20% per year, and their retention ratio (due to subsequent equity rounds) would be 0.5. (a) Calculate the VC's percentage share of your firm's equity if they invest $10 million. Show your work. (b) What is the A round post-money valuation, and the pre-money valuation, respectively? From: 09/30/2019 To: 10/10/2020 50 Stock Price 20 10 TTM Net EPS 60 PE Ratio Dec Mar Jun Oct