Question

Starware Software was founded last year to develop software for gaming applications. The founder initially invested...

Starware Software was founded last year to develop software for gaming applications. The founder initially invested

$ 800 000 and received 8 million shares of stock. Starware now needs to raise a second round of​ capital, and it has identified a venture capitalist who is interested in investing. This venture capitalist will invest $ 1.00 million and wants to own 20 % of the company after the investment is completed.

a. How many shares must the venture capitalist receive to end up with 20 % of the​ company? What is the implied price per share of this funding​ round?

b. What will the value of the whole firm be after this investment​ (the post-money​ valuation)?

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Starware Software was founded last year to develop software for gaming applications. The founder initially invested...
Starware Software was founded last year to develop software for gaming applications. The founder initially invested $ 1 comma 000 comma 000 and received 12 million shares of stock. Starware now needs to raise a second round of​ capital, and it has identified a venture capitalist who is interested in investing. This venture capitalist will invest $ 1.60 million and wants to own 35 % of the company after the investment is completed. a. How many shares must the venture...
Starware Software was founded last year to develop software for gaming applications. The founder initially invested...
Starware Software was founded last year to develop software for gaming applications. The founder initially invested $ 700 000 and received 9 million shares of stock. Starware now needs to raise a second round of​ capital, and it has identified a venture capitalist who is interested in investing. This venture capitalist will invest $ 1.40 million and wants to own 11 % of the company after the investment is completed. a. How many shares must the venture capitalist receive to...
Starware Software was founded last year to develop software for gaming applications. The founder initially invested...
Starware Software was founded last year to develop software for gaming applications. The founder initially invested $ 1 comma 000 comma 000 and received 12 million shares of stock. Starware now needs to raise a second round of​ capital, and it has identified a venture capitalist who is interested in investing. This venture capitalist will invest $ 1.20 million and wants to own 17 % of the company after the investment is completed. a. How many shares must the venture...
Starware Software was founded last year to develop software for gaming applications. The founder initially invested...
Starware Software was founded last year to develop software for gaming applications. The founder initially invested $800,000 and received 12 million shares of stock. Starware now needs to raise a second round of? capital, and it has identified a venture capitalist who is interested in investing. This venture capitalist will invest $1.20 million and wants to own 20% of the company after the investment is completed. a. How many shares must the venture capitalist receive to end up with 20%...
Three years​ ago, you founded your own company. You invested $104,000 of your own money and...
Three years​ ago, you founded your own company. You invested $104,000 of your own money and received 5.2 million shares of Series A preferred stock. Your company has since been through three additional rounds of financing.   Round Price​ ($) Number of Shares Series B 0.80 1,000,000 Series C 2.50 600,000 Series D 5.50 650,000 a. What is the​ pre-money valuation for the Series D funding​ round? b. What is the​ post-money valuation for the Series D funding​ round?
Three years​ ago, you founded your own company. You invested $100,000 of your own money and...
Three years​ ago, you founded your own company. You invested $100,000 of your own money and received 5.0 million shares of Series A preferred stock. Your company has since been through three additional rounds of financing.   Round Price Number of Shares Series B ​$0.70 1,000,000 Series C 3.00 500,000 Series D 8.00 550,000 a. What is the​ pre-money valuation for the Series D funding​ round? b. What is the​ post-money valuation for the Series D funding​ round? c. Assuming that...
Question: 1.You have started a company and are in lucklong dash—a venture capitalist has offered to...
Question: 1.You have started a company and are in lucklong dash—a venture capitalist has offered to invest.... 1.You have started a company and are in lucklong dash—a venture capitalist has offered to invest. You own 100 % of the company with 4.83million shares. The VC offers $ 1.04million for 820,000 new shares. a. What is the implied price per? share? b. What is the? post-money valuation? c. What fraction of the firm will you own after the? investment? 2. Roundtree...
Three years ago, you founded Outdoor Recreation, Inc., a retailer specializing in the sale of equipment...
Three years ago, you founded Outdoor Recreation, Inc., a retailer specializing in the sale of equipment and clothing for recreational activities such as camping, skiing, and hiking. So far, your company has gone through three funding rounds: Round Date Investor Shares Share Price ($) Series A Feb. 2009 You 500 000 1.00 Series B Aug. 2010 Angels 1 000 000 2.00 Series C Sept. 2011 Venture Capital 2 000 000 3.50 Currently, it is 2012 and you need to raise...
Jim Campbell is founder and CEO of​ OpenStart, an innovative software company. The company is​ all-equity...
Jim Campbell is founder and CEO of​ OpenStart, an innovative software company. The company is​ all-equity financed, with 100 million shares outstanding. The shares are trading at a price of $1. Rosenzweig currently owns 20 million shares. There are two possible states in one year. Either the new version of their software is a​ hit, and the company will be worth $160​million, or it will be a​ disappointment, in which case the value of the company will drop to $75...
Capitalization Table/Investor Exit ROI Problem Statement: Two Co-Founders are incorporating their startup, Company ABC, today.  Per the...
Capitalization Table/Investor Exit ROI Problem Statement: Two Co-Founders are incorporating their startup, Company ABC, today.  Per the incorporation filing, Company ABC will have 5,000,000 authorized Common Shares and 5,000,000 Preferred Shares.  A total of 500,000 Common Shares and 0 Preferred Shares will be issued and outstanding at formation.  One Co-Founder, the CEO, will own 75% of the equity or 375,000 Shares and the other Co-Founder, the CTO, will own 25% of the equity or 125,000 Shares. Based upon the Company ABC Business Plan...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT