The founder of a company issues 100,000 Class A preference shares for his own $250,000 investment. He then goes through three further rounds of investment, as shown below: $$\begin{array} { l c c }
\text { Round } & \text { Price } & \text { Number of Shares } \
\hline \text { Class B } & \$ 2.50 & 200,000 \
\text { Class C } & \$ 2.75 & 300,000 \
\text { Class D } & \$ 2.80 & 200,000
\end{array}$$ Which of the following is closest to the percentage of the company owned by the founder of the company?

Question

The founder of a company issues 100,000 Class A preference shares for his own $250,000 investment. He then goes through three further rounds of investment, as shown below: $$\begin{array} { l c c } 
\text { Round } & \text { Price } & \text { Number of Shares } \
\hline \text { Class B } & \$ 2.50 & 200,000 \
\text { Class C } & \$ 2.75 & 300,000 \
\text { Class D } & \$ 2.80 & 200,000
\end{array}$$ Which of the following is closest to the percentage of the company owned by the founder of the company?

Quizplus · Accepted Answer

The founder owns 100,000 shares. The total number of shares after all rounds is 100,000 + 200,000 + 300,000 + 200,000 = 800,000. The founder's ownership percentage is (100,000 / 800,000) * 100% = 12.5%.

The Founder of a Company Issues 100,000 Class a Preference