At the company's founding, on January 1 of 2004, the founders buy two million shares at $0.01
Question:
At the company's founding, on January 1 of 2004, the founders buy two
million shares at $0.01 each, for a total investment of $20,000. After making
considerable progress, they successfully raise a first round of financing from
Starburst Ventures: $1 million at $1 per share, for a total number of shares issued
of 1,000,000. How much ownership% does everyone have? What is the pre- and
post-money valuation?
Task 2) In the second round of investment, we see that a new firm, Nova
Ventures, has invested $3,750,000 for a 33.33% ownership stake. Obviously, this
dilutes both the founders' and Starburst Ventures' ownership stakes. What are
the new ownership% of all shareholders?
Accounting Principles
ISBN: 9781119707110
14th Edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Jill E. Mitchell