Question: Question 10 Consider Scenario 1, in which a VC invests $4 million for a 40% stake. Now contrast this with Scenario 2, in which VCs

Question 10

Consider Scenario 1, in which a VC invests $4 million for a 40% stake. Now contrast this with Scenario 2, in which VCs make a $4 million investment for 40% of the company, conditional upon a 10% option pool being created for employees. (Assume the current employee option pool is nonexistent). What is the difference in the value of the founders' share between Scenarios 1 and 2?

		No difference the VCs bear the cost of the option pool.
		$0.4 million
		$1 million
		$0.6 million

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