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

 

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Starware Software was founded last year to develop software for gaming applications. The founder initially invested $800,000 and received 9 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 $1.00 million and wants to own 33% of the company after the investment is completed. a. How many shares must the venture capitalist receive to end up with 33% 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 33% of the company? What is the implied price per share of this funding round? The venture capitalist will receive ☐ million shares. (Round to three decimal places.) The implied price per share is $ ☐ per share. (Round to the nearest cent.) b. What will the value of the whole firm be after this investment (the post-money valuation)? The value of the firm will be $ million. (Round to three decimal places.) Starware Software was founded last year to develop software for gaming applications. The founder initially invested $800,000 and received 9 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 $1.00 million and wants to own 33% of the company after the investment is completed. a. How many shares must the venture capitalist receive to end up with 33% 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 33% of the company? What is the implied price per share of this funding round? The venture capitalist will receive ☐ million shares. (Round to three decimal places.) The implied price per share is $ ☐ per share. (Round to the nearest cent.) b. What will the value of the whole firm be after this investment (the post-money valuation)? The value of the firm will be $ million. (Round to three decimal places.)

Answer rating: 100% (QA)

To calculate the number of shares the venture capitalist will receive to end up with 23 of the company we can use the concept of proportional ownershi... View the full answer