Widgets Inc seeks to raise $$5$m in VC financing. It is a US$-$based medical device company. The founder estimates that the exit value of the startup will be $$150$m in five years through an acquisition.

Q$8$: Suppose that a VC has required or target rate of return of $50\%$ and expects an exit in $5$ years $($no other financings expected$).$ What share of the company would she have to ask for given the $$5$m investment if she makes the investment?

Q$9$: If the company had $1,000,000$ shares before this offering, how many would the VC purchase with this equity claim?

Q$10$: Suppose that the VC expects future financing with dilution similar to Series B financings discussed in lecture. How does your answer to Q$8$ and Q$9$ change?