True / False

1. Venture capital fund X makes a $2 million dollar investment. 7 years later the firm liquidates its investment for $3 million. The IRR of the investment is greater than 6%. True / False

2. Venture capitalist X invests in 20% (1,000,000 shares of common stock) of a company for $10 million dollars and in the next round of financing the company issues an additional 5 million shares of common stock to venture capitalist Z for $5 million dollars. The stake of Venture capitalist X in the company is reduced to 10%. This is an example of dilution. True / False

3. Venture capital fund X makes a $2 million dollar investment. 8 years later the firm liquidates its investment for $3 million. The IRR of the investment is less than 4.9%. True / False