Valuation Project

1. Based on the following data, determine a reasonable valuation that YOU as an investor would place on a company in issuing a term sheet to make an investment in that company. Note that all amounts stated in the assumptions, except for estimated revenues that are based on the financial projections for your company, are based on comparables for similar companies which are operating in the same industry.

(1) Estimated revenues in year 5 (assumed exit year) - $25 million (2) After tax earnings in the year of exit are estimated at 12% of revenues, or $3 million. (3) PE ratio in the year of exit is 20X (4) Exit values approximate 2X of revenues in the exit year (5) The investors desired IRR yield based on the Wiltbank Study is 20X.

1. Assuming you are investing $750,000, what average exit value did you assume in your valuation project? Please include your numeric answer and an explanation of several sentences.

2. Assuming you are investing $750,000, what post-money value did you assume? Please include your numeric answer and an explanation of several sentences.

3. Assuming you are investing $750,000, what pre-money value did you place on the company? Please include your numeric answer and an explanation of several sentences.

4. Assuming you are investing $750,000, what post-money ownership percentage do you end up with after making the investment? Please include your numeric answer and an explanation of several sentences.

5. Assuming you are investing $750,000, what post-money ownership percentage do the founders/ owners end up with? Please include your numeric answer and an explanation of several sentences.