Question

You start off owning 100% of the stock in your company. Then you raise $200,000 in...

You start off owning 100% of the stock in your company. Then you raise $200,000 in a Seed round by issuing equity at a $1,000,000 premoney valuation; after a year, you raise $4,000,000 in a Series A round by issuing equity at a $9,000,000 premoney valuation. What percent of your company do you own after that?
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Answer #1

current ownership 100%.

Value of company after Seed round = premoney valuation + capital raised in Seed round = $1,000,000 + $200,000 = $1,200,000‬

ownership of investor after Seed round = $200,000/$1,200,000 = 0.1667 or 16.67%

Owner's ownership = 100% - 16.67% = 83.33‬%

Value of company after Series A round = premoney valuation + capital raised in Series A round = $9,000,000 + $4,000,000 = $13,000,000‬

ownership of investor after Series A round = $4,000,000/$13,000,000 = 0.3077 or 30.77%

Owner's ownership after Series A round = 100% - ownership of investor after Series A round - ownership of investor after Seed round = 100% - 30.77% - 16.67% = 52.56%

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