Question: Suppose startup Malware Eradication proposes a new subscription based software business aimed at personal computer users. The company plans a very aggressive growth and the

Suppose startup Malware Eradication proposes a new subscription based software business aimed at personal computer users. The company plans a very aggressive growth and the founders believe the company will be worth $25 million in 5 years. A reasonable discount rate for the software based on public comparables is 15%. Suppose a VC places a 5% probability of success on the company achieving its goals. What is the VCs estimate of the value of Malware Eradication?

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