Suppose that a VC invests $1 million in exchange for a 20% ownership share of a business and wants to earn an annual 40% return over the next five years of its ownership. What does the business need to be worth at the end of that time in order to deliver an annual 40% return (assuming no dilution from follow-on financings)?

• $5.38 million
• $10.0 million
• $16.8 million
• $26.9 million