Question: The venture Interactive.com anticipates that it will need $12,000,000 in venture capital to achieve a terminal value of $500,000,000 in five years. The founder of

The venture Interactive.com anticipates that it will need $12,000,000 in venture capital to achieve a terminal value of $500,000,000 in five years. The founder of Interactive.com wants to have a venture investor inject $12,000,000 in three rounds of $4,000,000 at time 0, 2 and 4 with time 5 exit value of $500,000,000. If the founder anticipates returns of 60%, 40% and 20% for round 1, 2 and 3, respectively: (a) what percent of ownership is sold during the first round? (b) During the second round? (c) During the third round? (d) What is the founders year-five ownership percentage?

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