HomeworkLib
Question

If a VC invests $1 million and secures a 20% ownership share, the pre-money valuation is:...

If a VC invests $1 million and secures a 20% ownership share, the pre-money valuation is:

Group of answer choices

A. $4 million

B. $5 million

C. $1 million

D. $6 million

business   finance   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

Pre money valuation = Amount/% share

= 1 million/20%

=$5 million

i.e. B is the answer

0 0
Add a comment
Know the answer?
Add Answer to:
If a VC invests $1 million and secures a 20% ownership share, the pre-money valuation is:...
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. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • Question 27: [Venture Capital Valuation Method] A venture capitalist firm wants to invest $1.5 million in...

    Question 27: [Venture Capital Valuation Method] A venture capitalist firm wants to invest $1.5 million in your NYDeli dot.com venture that you started six months ago. You do not expect to make a profit until year four when your net income is expected to be $3 million. The common stock of BioSystems, a “comparable” firm, currently trades in the over-the-counter market at $30 per share. BioSystems’ net income for the most recent year was $300,000 and the firm has 150,000...

  • Pipestein Corporation receives 1 round of financing equal to $12M at a $15M pre-money valuation. The...

    Pipestein Corporation receives 1 round of financing equal to $12M at a $15M pre-money valuation. The VC receives participating preferred stock with a 1x liquidation preference and 2.5x cap. If the company is acquired for $100M, how much will the VC receive?

  • CORPORATE VALUATION Brandtly Industries invests a large sum of money in R&D; as a result, it...

    CORPORATE VALUATION Brandtly Industries invests a large sum of money in R&D; as a result, it retains and reinvests all of its earnings. In other words, Brandtly does not pay any dividends, and it has no plans to pay dividends in the near future. A major pension fund is interested in purchasing Brandtly's stock. The pension fund manager has estimated Brandtly's free cash flows for the next 4 years as follows: $2 million, $5 million, $12 million, and $16 million....

  • CORPORATE VALUATION Brandtly Industries invests a large sum of money in R&D; as a result, it retains and reinvests...

    CORPORATE VALUATION Brandtly Industries invests a large sum of money in R&D; as a result, it retains and reinvests all of its earnings. In other words, Brandtly does not pay any dividends, and it has no plans to pay dividends in the near future. A major pension fund is interested in purchasing Brandtly's stock. The pension fund manager has estimated Brandtly's free cash flows for the next 4 years as follows: $3 million, $6 million, $11 million, and $15 million....

  • QUESTION 16 The pre-money valuation of Pinterest on June 6, 2017 was approximately $2 billion less than the valuation of Pinterest at the $19 pe share IPO price. True False QUESTION 17 The operating...

    QUESTION 16 The pre-money valuation of Pinterest on June 6, 2017 was approximately $2 billion less than the valuation of Pinterest at the $19 pe share IPO price. True False QUESTION 17 The operating activities of Pinterest were a use of cash rather than a source of cash in 2017 and 2018. True False QUESTION 18 The global advertising market is projected to grow to $1 trillion in 2022 from $964 billion in 2018, representing a 5% compound annual growth...

  • Loomix Inc,is a company that has a history of losing money and has accumulated $100 million...

    Loomix Inc,is a company that has a history of losing money and has accumulated $100 million in net operating losses. You expect the company to generate an operating loss of $50 million next year, followed by pre-­‐tax operating profits of $75 million and $125 million in the following two years. If your marginal tax rate is 40%, how much will Loomix pay cumulatively as taxes in the next three years? Group of answer choices $90 million $60 million $20 million...

  • Barrett Industries invests a large sum of money in R&D; as a result, it retains and...

    Barrett Industries invests a large sum of money in R&D; as a result, it retains and reinvests all of its earnings. In other words, Barrett does not pay any dividends, and it has no plans to pay dividends in the near future. A major pension fund is interested in purchasing Barrett's stock. The pension fund manager has estimated Barrett's free cash flows for the next 4 years as follows: $3 million, $6 million, $10 million, and $15 million. After the...

  • Brandtly Industries invests a large sum of money in R&D; as a result, it retains and...

    Brandtly Industries invests a large sum of money in R&D; as a result, it retains and reinvests all of its earnings. In other words, Brandtly does not pay any dividends, and it has no plans to pay dividends in the near future. A major pension fund is interested in purchasing Brandtly's stock. The pension fund manager has estimated Brandtly's free cash flows for the next 4 years as follows: $4 million, $6 million, $9 million, and $14 million. After the...

  • The purpose of valuation for non-market ecosystem services is not to create values for them but...

    The purpose of valuation for non-market ecosystem services is not to create values for them but it is to formally estimate the values that people already have for them so that these services can be better considered in management decisions. Group of answer choices True False Option price is the amount of money than an individual will pay or must be compensated to be indifferent between the status quo conditions of the ecosystem and the new, proposed condition. Group of...

  • finds the the stock valuation by calculating the difference between value of assets and value of...

    finds the the stock valuation by calculating the difference between value of assets and value of debt. Group of answer choices a)Asset-based valuation model b)Share price multiple model c)Capital asset pricing model d)Discount cash flow model

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT