Answered step by step
Verified Expert Solution
Link Copied!

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 11 million shares of stock. Starware

image text in transcribed
Starware Software was founded last year to develop software for gaming applications. The founder initially invested $1,000,000 and received 11 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 $1.20 million and wants to own 30% of the company after the investment is completed. a. How many shares must the venture capitalist receive to end up with 30% 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)? a. How many shares must the venture capitalist receive to end up with 30% of the company? What is the implied price per share of this funding round? The venture capitalist will receive million shares. (Round to three decimal places.)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Stock Market Investing For Beginners

Authors: Andrew P.C.

1st Edition

1549522132, 978-1549522130

More Books

Students also viewed these Finance questions

Question

Explain TPM, its purpose, and how it is conducted.

Answered: 1 week ago

Question

Write formal and informal proposals.

Answered: 1 week ago

Question

Describe the components of a formal report.

Answered: 1 week ago

Question

Write formal and informal reports.

Answered: 1 week ago