You Founded Your Own Firm Three Years Ago

question 18

Multiple Choice

You founded your own firm three years ago. You initially contributed $200,000 of your own money and in return you received 3 million shares of stock. Since then, you have sold an additional 3 million shares of stock to angel investors. You are now considering raising capital from a venture capital firm. This venture capital firm would invest $6 million and would receive 3million newly issued shares in return. After the venture capitalist's investment, what percentage of the firm will you own?

• A) 42%
• B) 33%
• C) 25%
• D) 20%

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Definitions:

Stalwarts

Well-established companies known for their durability, stable earnings, and regular dividend payments.

Slow-growers

Companies or stocks that exhibit lower-than-average growth in terms of revenue or earnings, often offering stable dividends.

Industry Life Cycle

The Industry Life Cycle describes the stages of growth and development that an industry undergoes, beginning with its introduction, growth, maturity, and eventual decline.

Start-up

A young company founded to develop a unique product or service, bring it to market, and make it viable and sustainable.