An Entrepreneur Founded His Company Using $200,000 of His Own

question 45

Multiple Choice

An entrepreneur founded his company using $200,000 of his own money, issuing himself 200,000 shares of stock. An angel investor bought an additional 100,000 shares for $150,000. The entrepreneur now sells another 400,000 shares of stock to a venture capitalist for$2 million. What is the post-money valuation of the company?

• A) $1,750,000
• B) $1,925,000
• C) $3,500,000
• D) $4,025,000

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Definitions:

Fourteenth Amendment

An amendment to the United States Constitution, granting citizenship to all persons born or naturalized in the U.S., including former slaves, and providing all citizens with equal protection under the laws.

Chinese Exclusion Act

1882 law that halted Chinese immigration to the United States.

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