What is the cash-on-cash and IRR for investors? Founders put in $750,000 cash in Year...
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What is the cash-on-cash and IRR for investors?
Founders put in $750,000 cash in Year 1and then raise $2.4 million Series A financing in Year 2. The pre-money valuation for the A round was $2.5M. They exit in Year 6 for 1.75x revenue of $17.5M. They also must pay off debt of $1.2M at this point and the Series A investors receive a 10% dividend per year (cumulative) paid off the top at the time of the sale.
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