Question
The successful exit value of portfolio firm is $40M with 30% probability of failure. The target multiple for a VC is 4. If VC is
The successful exit value of portfolio firm is $40M with 30% probability of failure. The target multiple for a VC is 4. If VC is expected to own 10% of the portfolio firm (final ownership percentage) at exit, what is the partial valuation to VC today? Suppose VCs cost of capital is 10%.
$1M
$2M
$3M
$4M
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Fundamentals Of Investments Valuation And Management
Authors: Bradford D Jordan, Thomas W. Miller Jr., Steven D. Dolvin
6th Edition
0073530719, 9780073530710
