Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. in what instances would entrepreneurs prefer equit

In what instances would entrepreneurs prefer equity crowd funding vs product-based crowd funding? Please explain...

80.2K

Verified Solution

Question

Finance

In what instances would entrepreneurs prefer equity crowd funding vs product-based crowd funding? Please explain with examples.

Lets say you invested $250K in a convertible note during the seed round of a startup. The note had a $12M cap and a discount of 30%. At Series A, the startup raises money at a $15M valuation (To avoid confusion, consider this Pre-Money). Would the discount or the cap apply on your convertible note? Please include your formula below.

What is the expansion multiplier when discussing valuations and how does that impact a companys exit valuation?

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Finance
1.2K views

Assume that you manage a risky portfolio with an expected rate of return of 20% and...

Statistics
1.2K views

Find the sample size needed to estimate the percentage of Virginia residents who are left-handed. Use...

Biology
1.2K views

During Diabetic Ketosis when insulin is absent, fats are released and processed by Beta-oxidation. Which of...

General Management
1.2K views

Directions Students will conduct an analysis on the current state of the compensation system and address pay-for-performance...

Physics
1.2K views

Two point charges 4 C and 4 C are placed at a distance 1 5...

Basic Math
1.2K views

Accounting equation The total assets and total liabilities in millions of ABC Corporation and XYZ...

Basic Math
1.2K views

The function g x x 4 3 is restricted to the domain graph represents the...

Basic Math
1.2K views

Investors buy a studio apartment for $200,000. Of this amount, they have a down payment...

Basic Math
1.2K views

8. Students whose test score is within 12 points of the number 87 will earn...

Algebra
1.2K views

Check Your Understanding 1 The graph of a function f x and a table of...

Accounting
1.2K views

Question 1: Your employer, CYC Financial Services Inc. (a U.S. based company) is in the...

Accounting
1.2K views

Which of the following are internal controls around cash? 1.Mandatory vacations. ll. Bank reconciliations. Ill....