Starware Software was founded last year to develop software for gaming applications. The founder initially invested

$ 900 comma 000

and received

8

million shares of stock. Starware now needs to raise a second round of capital, and it has identified a venture capitalist who is interested in investing. This venture capitalist will invest

$ 1.20

million and wants to own

22 %

of the company after the investment is completed.

a. How many shares must the venture capitalist receive to end up with

22 %

of the company? What is the implied price per share of this funding round?

b. What will the value of the whole firm be after this investment (the post-money valuation)?

a. How many shares must the venture capitalist receive to end up with

22 %

of the company? What is the implied price per share of this funding round?

The venture capitalist will receive

nothing

million shares. (Round to three decimal places.)