You are a venture capitalist considering a $1.5 million investment in Floating Line Electronics Apparatus, Inc. (FLEA) that is expected to require no additional capital through year 3. FLEA is expected to have EBITDA of $2.7 million in year 3. You expect to get your initial investment plus your return at that time by selling your stock. In your opinion, FLEA should at that time be comparable to companies priced at 12 times EBITDA. Flea has no debt outstanding and plans to pay no dividends in years 1 through 3. There are already 400,000 shares outstanding that are owned by the entrepreneur and other investors. You require 50% rate of return from this type of investment.

What equity percentage ownership would you demand?