Starware Software was founded last year to develop software for gaming applications. The founder initially invested 800,000 and received 8 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 1.00 million and wants to own 20% of the company after the investment is completed.

a. How many shares must the venture capitalist receive to end up with 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)?