An entrepreneur first started his business with $100,000. Later, a venture capitalist agrees to invest $300,000 to sustain the growth. In return, this VC will take up a 50% equity position in the firm. How much is this business worth now?

Question

Quizplus · Accepted Answer

The venture capitalist is investing $300,000 for a 50% equity position in the firm. This means that the total value of the firm after the investment is $600,000 (since $300,000 is half the value). Therefore, the business is now worth $600,000.

An Entrepreneur First Started His Business with $100,000