Question:An investor offers you $817,151 in exchange for shares of your
start-up company. The investor demands...
Question
An investor offers you $817,151 in exchange for shares of your
start-up company. The investor demands...
An investor offers you $817,151 in exchange for shares of your
start-up company. The investor demands an annual rate of return of
67%, and expect that your IPO will be in 5 years. At that time you
expect your firm to have annual income of around $1,837,981
dollars. A similar firm was recently acquired for $18,987,227
dollars. At the time of acquisition, their income was $1,844,203
million dollars per year.
What percentage of your equity should you give to the
investor?