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30 September, 09:12

You started a venture 2 years ago with $400,000 dollars and own 60% of the 500,000 shares issued. What is the pre and post money valuations under each deal offered: • Alpha Ventures offers $200,000 for 20% of the firm • Beta Ventures offers $400,000 for 600,000 new shares • Kappa Ventures offers $200,000 for 100,000 existing shares

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  1. 30 September, 12:38
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    Alpha Venture : Post money $1,000,000

    Alpha Venture : Post money $800,000

    Beta Ventures Post money $400,000

    Beta Venture Pre-money $800,000

    Kappa Ventures Post money $200,000

    Kappa Ventures Pre money $400,000

    Explanation:

    Calculation for Alpha Ventures Post money:

    $200,000/20%=$ 1,000,000

    Alpha Ventures Pre-money will be:

    $1,000 000 - $200,000

    = $800,000

    Calculation for Beta Ventures Post money

    = $400,000

    Beta Ventures Pre-money will be:

    =$ 400,000+$400,000

    =$800,000

    Calculation of Kappa Ventures Post money:

    = $200,000

    Kappa venture Pre-money will be:

    = $200,000+$200$000

    = $400,000
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