A startup that is fully owned by the founder is reporting $4 million of revenue and is expecting an annual revenue growt

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answerhappygod
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A startup that is fully owned by the founder is reporting $4 million of revenue and is expecting an annual revenue growt

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A startup that is fully owned by the founder is reporting $4
million of revenue and is expecting an annual revenue growth of
60%. The firm is seeking an investment of $3 million from a Venture
Capital Fund for its first round of funding. The required rate of
return for the VC is 45%. The investment horizon is 6 years. The
expected net profit margin of the startup is 18% in the year 6, and
the expected P/E multiple is 10X. The entrepreneur is currently
(before the first round of funding) holding 2 million shares with
100% equity ownership.
1) The terminal value of the firm is
2) The Post-Money Valuation of the firm at the time of
first round of funding is
3) The number of shares issued to the VC investor is:
4) The expected net profit for the year 6 is
5) The residual ownership of the entrepreneur after the
first round of funding is
6) The Expected Revenue in the year 6 is:
7) The ownership to be offered to the VC on a fully diluted
basis for the required funding of $3 million is:
8) The Pre-Money Valuation of the firm at the time of first
round of funding is
9) The total number of shares outstanding after the first
round of funding will be
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