You Founded Your Own Firm Three Years Ago

question 91

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 2 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 4 million newly issued shares in return. Suppose you sold the 2 million shares to the angel investor for $500,000. What was the post-money valuation of your shares immediately following the angel investor's investment?

• A) $500,000
• B) $0.75 million
• C) $1.5 million
• D) $1.9 million

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Definitions:

Evolutionary History

The study of the development of life on Earth over millions of years, including the processes that have shaped the diversity of life.

Old World Monkeys

A group of primates native to Africa and Asia, distinguished from New World monkeys by certain physical traits.

Apes

Large primates with no tail, including gorillas, chimpanzees, orangutans, and gibbons, closely related to humans.

Million Years

A period of time equal to one thousand years, used in discussing geological time or the age of the Earth and its species.