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A startup that is fully owned by the founder is reporting $4 million of revenue...

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Finance

A startup that is fully owned by the founder is reporting $4 million of revenue and is expecting an annual revenue growth of 60%. The firm is seeking an investment of $3 million from a Venture Capital Fund for its first round of funding. The required rate of return for the VC is 45%. The investment horizon is 6 years. The expected net profit margin of the startup is 18% in the year 6, and the expected P/E multiple is 10X. The entrepreneur is currently (before the first round of funding) holding 2 million shares with 100% equity ownership.

1) The terminal value of the firm is

2) The Post-Money Valuation of the firm at the time of first round of funding is

3) The number of shares issued to the VC investor is:

4) The expected net profit for the year 6 is

5) The residual ownership of the entrepreneur after the first round of funding is

6) The Expected Revenue in the year 6 is:

7) The ownership to be offered to the VC on a fully diluted basis for the required funding of $3 million is:

8) The Pre-Money Valuation of the firm at the time of first round of funding is

9) The total number of shares outstanding after the first round of funding will be

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