You founded your own firm three years ago. You initially contributed $200,000 of your own money and in return you received 2 million shares of stock. Since then, you have sold an additional 2 million shares of stock to angel investors. You are now considering raising capital from a venture capital firm. This venture capital firm would invest $5 million and would receive 2 million newly issued shares in return.

Assuming that this is the venture capitalist's first investment in your firm, what percentage of the firm will the venture capitalist own?

A.

33%

B.

25%

C.

42%

D.

20%