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Question 1: You've launched a business that is forecasted to need $12million in venture capital staged in three rounds of $4million at years 0, 1,
Question 1: You've launched a business that is forecasted to need $12million in venture capital staged in three rounds of $4million at years 0, 1, and 2. The venture will have a terminal value of $250million in five years. The expected rates of return in rounds 1, 2, and 3 are 60%, 40%, and 20%, respectively. A: What percent ownership is sold in each of the three rounds, and what is the founder's remaining ownership percentage? B: Assume the founder started with 8,000 shares. How many new shares are issued in each of the three rounds? Also, state the share price for each of these three rounds. C: Now, in addition to the three rounds of financing, also assume that the founder wants to set aside 10% of the total equity for employees. Provide new answers for the questions posed in parts A and B based on this assumption. Question 1: You've launched a business that is forecasted to need $12million in venture capital staged in three rounds of $4million at years 0, 1, and 2. The venture will have a terminal value of $250million in five years. The expected rates of return in rounds 1, 2, and 3 are 60%, 40%, and 20%, respectively. A: What percent ownership is sold in each of the three rounds, and what is the founder's remaining ownership percentage? B: Assume the founder started with 8,000 shares. How many new shares are issued in each of the three rounds? Also, state the share price for each of these three rounds. C: Now, in addition to the three rounds of financing, also assume that the founder wants to set aside 10% of the total equity for employees. Provide new answers for the questions posed in parts A and B based on this assumption
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