Question
Starware Software was founded last year to develop software for gaming applications. The founder initially invested $700,000 and received 10 million shares of stock. Starware
Starware Software was founded last year to develop software for gaming applications. The founder initially invested $700,000 and received 10 million shares of stock. Starware now needs to raise a second round ofcapital, and it has identified a venture capitalist who is interested in investing. This venture capitalist will invest $1.20 million and wants to own 36% of the company after the investment is completed.
a. How many shares must the venture capitalist receive to end up with 36% of thecompany?
The venture capitalists will receive ? million shares. (Round to three decimalplaces.)
What is the implied price per share of this fundinground?
The price is $ ? per share.(Round to the nearestcent.)
b. What will the value of the whole firm be after this investment(the post-moneyvaluation)?
The value of the firm will be $ ? million.(Round to three decimalplaces.)
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