Starware Software was founded last year to develop software for gaming applications. The founder initially invested...

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Finance

Starware Software was founded last year to develop software forgaming applications. The founder initially invested $ 800,000 andreceived 8 million shares of stock. Starware now needs to raise asecond round ofâ€‹ capital, and it has identified a venturecapitalist who is interested in investing. This venture capitalistwill invest $ 1.00 million and wants to own 20 % of the companyafter the investment is completed.
a. How many shares must the venture capitalist receive to end upwith 20 % of theâ€‹ company? What is the implied price per share ofthis fundingâ€‹ round?
b. What will the value of the whole firm be after thisinvestmentâ€‹ (the post-moneyâ€‹ valuation)?
a. How many shares must the venture capitalistreceive to end up with 20 % of theâ€‹ company? What is the impliedprice per share of this fundingâ€‹ round?
The venture capitalist will receive _ million shares. â€‹(Round to three decimalâ€‹ places.)
The implied price per share is â€‹$per share.â€ƒâ€ƒâ€‹(Round to thenearestâ€‹ cent.)
b. What will the value of the whole firm beafter this investmentâ€‹ (the post-moneyâ€‹ valuation)? The value ofthe firm will be â€‹$million. â€‹ (Round to three decimalâ€‹places.)

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Answer a The founder initially invested 800000 and received 8 million shares of stock This venture capitalist will invest 100 million and wants to own 20 of the company after the investment is completed If See Answer

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