You Founded Your Own Firm Three Years Ago

question 14

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 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. After the venture capitalist's investment, the post-money valuation of the angel investor's shares is closest to ________.

• A) $12.5 million
• B) $4.0 million
• C) $5.0 million
• D) $2.5 million

---

Definitions:

Quantitative Restriction

Measures imposed by governments to limit the quantity of goods that can be imported or exported over a specified period.

Luxury Automobiles

High-end cars that offer superior performance, comfort, and amenities, often associated with status, exclusivity, and a high price point.

Quota

A fixed share or a specific limit on goods or services, often imposed by governments on imports or exports.

Importing

The process of bringing goods or services into a country from abroad for sale.