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You Are a Venture Capitalist That Is Going to Invest

Question 77

Multiple Choice

You are a venture capitalist that is going to invest $7 million dollars today in a firm that is projected to be worth $200 million six years from today when it is expected to have an initial public offering.If you require a 35% annual return on investments with this kind of risk,then what portion of the equity of the firm should you own after the investment?


A) 3.50%
B) 21.12%
C) 35.00%
D) none of the above

Correct Answer:

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