Consider a new firm in the nanotechnology field that seeks a second round of financing. This year, it has revenues of $2 million and projects profitability of $200,000 next year on revenues of $3 million. It is raising

$1 million from a new set of investors. What share of the company should it offer to the new investors? Assume it can increase profits at a rate of 25 percent per year over the next five years.