Use the Information for the Question(s)below

question 6

Multiple Choice

Use the information for the question(s) below.
You founded your own firm three years ago.You initially contributed $200,000 of your own money and in return you received 2 million shares of stock.Since then,you have sold an additional 1 million shares of stock to angel investors.You are now considering raising capital from a venture capital firm.This venture capital firm would invest $5 million and would receive 2 million newly issued shares in return.
-Assuming that this is the venture capitalist's first investment in your firm,what percentage of the firm will the venture capitalist own?

• A)50%
• B)40%
• C)25%
• D)33%

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Definitions:

Bacterial Endocarditis

An infection of the heart's inner lining or the heart valves caused by bacteria, leading to serious complications if untreated.

Osler Nodes

Painful, red, raised lesions found on the hands and feet, associated with infective endocarditis.

Janeway Lesions

Non-tender, small, erythematous lesions found on the palms and soles, associated with infective endocarditis.

Low-Cost Provider

A business strategy focusing on offering goods or services at the lowest possible price to gain competitive advantage.