An investor offers $150,000 for 30% of the company.What is the post-money valuation of the company?

Question

Quizplus · Accepted Answer

To find the post-money valuation of the company, we need to first calculate the pre-money valuation.

Pre-money valuation = Amount of investment ÷ % of the company bought 
Pre-money valuation = $150,000 ÷ 30% = $500,000

Post-money valuation = Pre-money valuation + Amount of investment 
Post-money valuation = $500,000 + $150,000 = $650,000

Therefore, the post-money valuation of the company is $650,000. Option B is the correct answer.

An Investor Offers $150,000 for 30% of the Company