Pinnacle Venture, a PE investor is considering investing INR 4000 million in the equity of Best Systems, a start-up IT company. Pinnacle venture's required rate of return from this investment is 40 percent and its planned holding period is 5 years. Best Systems has projected an EBITDA of INR 5000 million for year 5. An EBITDA multiple of 6 for year 5 is considered reasonable. At the end of year 5, Best Systems is likely to have a debt of INR 2000 million and a cash balance of INR 600 million.
i.What ownership share in Best Systems should Pinnacle Venture ask for?
ii. What is the post-money investment value of Best Systems equity?
iii. What is the pre-money investment value of Best Systems?

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