Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Starware Software was founded last year to develop software for gaming applications. The founder initially invested $1,000,000 and received 12 million shares of stock. Starware
Starware Software was founded last year to develop software for gaming applications. The founder initially invested $1,000,000 and received 12 million shares of stock. Starware now needs to raise a second round of capital, and it has identified a venture capitalist who is interested in investing. This venture capitalist will invest $1.60 million and wants to own 12% of the company after the investment is completed. a. How many shares must the venture capitalist receive to end up with 12% of the company? What is the implied price per share of this funding round? b. What will the value of the whole firm be after this investment (the post-money valuation)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started