M3 Venture capital Investment Quiz

Related Solution

Week 3 Take a Stand_...

Yes, as a matter of policy, the doctors should be able to prescribe marijuana to alleviate pain. Law was passed which stated that the law allowed the seriously ill Californians, especially the ones su...

Week 3 Take a Stand

Yes, as a matter of policy, the doctors should be

Module 1 Discussion_...

Hello Class! Hope everyone is doing well! My name is ######. I live in southern California about 45 minutes north of San Diego and am finishing up my bachelors degree in Business Administration. I st...

Module 1 Discussion

Hello Class! Hope everyone is doing well! My name

Week 6 - Discussion...

Walmart faced various international challenges. When it had decided to expand its business. He faced various issues. Walmart started to expand its business not only one country but also globally. The...

Week 6 Discussion 2

Walmart faced various international challenges. Wh

Q Your company raises a $3m A-round at a $7m pre-$ valuation, with investors receiving a basic liquidation preference. a. How much will common shareholders receive if the company sells for $50m? b. How much will common shareholders receive if the company sells for $5m? c. How much would the company have to sell for in order for common shareholders to receive a total of $5m? d. How much would the company have to sell for in order for common shareholders to receive a total of $50m?

View Related Questions

Solution Preview

View Complete Solution

a. investor's Stake = 3/(7+3) = 30% Investor receives = 50m*30% = 15m So the common shareholder gets = 50-15 = $35m b. Investor receives = 5m*30% = 1.5m but investor would get $3m So the common shareholder gets = 5-3 = $2m c. Company would minimum sell for = 5+3=8 d. Company would minimum sell for = 50/(1-30%) = $71.43m

Student Solution

"Education is the most powerful weapon which you can use to change the world”
– Nelson Mandela

1 University

1 Course