Describe 3 different Financial Instruments as they pertain to this specific investment opportunity, outlining the advantages and
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Question:
Describe 3 different Financial Instruments as they pertain to this specific investment opportunity, outlining the advantages and disadvantages of each from the perspective of a VC investor
Company name: Millie Tech Ltd.
- Investment required: $250,000
- Equity Considered to be offered for this investment: 20%
- Product: Wearable device for animals that translates noises they make into simple, English language audible demands
- Idea: Innovative, Scalable, Targeted to growing segment
- Target Market: General consumers
- Prototype: ‘Beta’ phase launched
- Patents: Pending
- Management Team: Experienced, Motivated
- Strategic Relationships: development partnership Buffalo Bill & Precious Inc., a well established community dog training company
- Product Rollout or Sales: Patent is still pending
- Founder’s Investment to Date: $180,000
- Profit: $0
- Revenue: $50,000
- Management (Option Pool): $0
- Industry (Price/Sales) Ratio: 7.5X
- Estimated Average Value of Successful Startups in the region: $1,300,000
- Expected Sale Price on Exit: $21,000,000
- Investor’s Required ROI: 10X
Expert Answer:
1 Convertible Note A convertible note is a debt instrument that is converted into equity at a later ... View the full answer
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