Use the information for the question(s) below.
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 $5 million and would
receive 2 million newly issued shares in return.
-Suppose you sold the 1 million shares to the angel investor for $500,000. What was the post-money valuation of your shares immediately following the angel investor's investment?
A) $500,000
B) $2.5 million
C) $1.0 million
D) $2.0 million
Correct Answer:
Verified
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