Question: Tiger Software was founded last year to develop software for gaming applications. The founder initially invested $800000 and received eight million shares. Tiger now needs

Tiger Software was founded last year to develop software for gaming applications. The founder initially invested $800000 and received eight million shares. Tiger now needs to raise a second round of capital, and it has identified a venture capitalist who is interested in investing. This venture capitalist will invest

$1 million and wants to own 20% of the company after the investment is completed.

a. How many shares must the venture capitalist receive to end up with 20% of the company? What is the implied price per share of this funding round?

b. What will the value of the whole firm be after this investment (the post-money valuation)?

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