Question

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 you own only the Series A preferred stock​ (and that each share of all series of preferred stock is convertible into one share of common​ stock), what percentage of the firm do you own after the last funding​ round?

Answer 1

The answer for above problem is explained below.