Questions.

Two entrepreneurs launch their startup with 20,000 euros each, and they constitute their company with 1/sh share nominal value. Over time, they complete the following rounds of investment:

1. 6 months after the foundation, they get 50,000 from an accelerator program for 9% of the company.

2. 1 year later they raise 400,000 from a business angels syndicate for 25% of the company.

Answer the following questions, showing your work:

1. What was the implied valuation of the company for the accelerator? 2. How many shares did the accelerator receive when they first invested? 3. How many shares did the accelerator receive when the syndicate came in? 4. What price did the accelerator pay for their shares? 5. What is the pre-money valuation of the company at the syndicates round? 6. What premium per share did the syndicate pay? 7. How many shares are owned by the founders at the end of the process? 8. How much is the value of the total common stock at the end of the process? 9. By how much did the accelerator multiply the value of their shares when the syndicate came in? 10. If a 10% of the equity has to be reserved as an option pool when the accelerator comes in, by how much will the accelerator be diluted on that round?