Question
Question 10 Consider Scenario 1, in which a VC invests $4 million for a 40% stake. Now contrast this with Scenario 2, in which VCs
Question 10
Consider Scenario 1, in which a VC invests $4 million for a 40% stake. Now contrast this with Scenario 2, in which VCs make a $4 million investment for 40% of the company, conditional upon a 10% option pool being created for employees. (Assume the current employee option pool is nonexistent). What is the difference in the value of the founders' share between Scenarios 1 and 2?
| No difference the VCs bear the cost of the option pool. | ||
| $0.4 million | ||
| $1 million | ||
| $0.6 million |
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Marketing For Financial Advisors
Authors: Eric Bradlow, Keith Niedermeier, Patti Williams
1st Edition
