You founded your own firm three years ago. You initially contributed $200,000 of your own money and in return you received 2 million shares of stock. Since then, you have sold an additional 1 million shares of stock to angel investors. You are now considering raising capital from a venture capital firm. This venture capital firm would invest $4 million and would receive 2 million newly issued shares in return. The post-money valuation of your firm is closest to ________.

Question

Quizplus · Accepted Answer

A) Total shares outstanding = 2 million + 1 million + 2 million = 5 million shares
The venture capitalist would be paying 11ea84dc_f51c_fb0f_9a63_3b49c0dbf8cd_TB1316_11_TB1316_11 = $2 per share 11ea84dc_f51d_2220_9a63_d5d45616bb90_TB1316_00_TB1316_00

You Founded Your Own Firm Three Years Ago