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Your​ start-up company needs capital. Right​ now, you own 100 % of the firm with 9.6...

Your​ start-up company needs capital. Right​ now, you own

100 %

of the firm with

9.6

million shares. You have received two offers from venture capitalists. The first offers to invest

$ 2.93

million for

1.11

million new shares. The second offers

$ 2.07

million for

473,000

new shares.

a. What is the first​ offer's post-money valuation of the​ firm?

b. What is the second​ offer's post-money valuation of the​ firm?

c. What is the difference in the percentage dilution caused by each​ offer?

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Answer #1

Given,

Shares outstanding = 9.6 million shares

First offer investment = $ 2.93 million

First offer shares = 1.11 million shares

Second offer investment = $ 2.07 million

Second offer shares = 473000 shares or 0.473 million shares

Solution :-

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