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Your venture capital firm has just invested $1.5 million in a startup that develops software for managing power usage in electric vehicle batteries. That capital
Your venture capital firm has just invested $1.5 million in a startup that develops software for managing power usage in electric vehicle batteries. That capital will provide the firm with one million shares. The deal also includes another $50,000 at the end of years 1, 2, and 3 to assist with working capital requirements. After those investments, the company demands payment of $200,000 each year at the end of year 4 and continuing for years 5 and 6. Your major liquidity event will be an IPO expected by the end of year 9, and you expect to be able to sell your shares at $15 per share. What is the expected ROI on this investment? o about 27.4% O about 30.0% O about 35.0% Your venture capital firm has just invested $1.5 million in a startup that develops software for managing power usage in electric vehicle batteries. That capital will provide the firm with one million shares. The deal also includes another $50,000 at the end of years 1, 2, and 3 to assist with working capital requirements. After those investments, the company demands payment of $200,000 each year at the end of year 4 and continuing for years 5 and 6. Your major liquidity event will be an IPO expected by the end of year 9, and you expect to be able to sell your shares at $15 per share. What is the expected ROI on this investment? o about 27.4% O about 30.0% O about 35.0%
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