A company decided to raise $60,000 in January from its founders. The CEO contributed $4,000, while Exec 1 contributed $2,000 and Exec 2 contributed $2,000 also. An equity investment of $52,000 was also contributed as a shareholder loan with no interest and secured by loans, with payment due at the maturity of 40 years. What percentage of the company does the CEO own in March?

2. Pre-money enterprise value in April is $2M, and an external equity investor would contribute $0.25M that month, what percentage of the company does the CEO own now?

3. Does it make sense to accept the initial $60,000 as an equity loan? Would a promissory note have been a better alternative? Is there another security investment type that would have been better?

Answer rating: 100% (QA)

1 To determine the CEOs ownership percentage in March we need to calculate the proportion of the CEOs contribution relative to the total contributions ... View the full answer