Use the Information for the Question(s)below

question 19

Multiple Choice

Use the information for the question(s) below.
You founded your own firm two years ago. You initially contributed $250 000 of your own money and in return you received 2.5 million shares of stock. Since then, you have sold an additional 1.25 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)33%
• B)50%
• C)45%
• D)35%

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Definitions:

Reality Shock

The feeling of surprise and disorientation experienced when encountering a situation vastly different from what was anticipated, often in a professional context.

Subconsciously Guide

Describes the process of influencing actions or decisions in a manner that is not fully conscious or aware.

Organizational Culture

The set of shared values, beliefs, behaviors, and practices that characterizes an organization, influencing how people interact and work together within it.

Organizational Socialization

The process by which a new employee learns the organizational values, norms, and required behaviors which permit him to participate as a member of the organization.