Venture Capital



1
If we know the amount invested by the venture capitalist, his liquidation and equity, How do we calculate the profit the venture capitalist makes after selling the company?

1 Answer(s)


0

If amount invested = $1 million
Liquidation Pref = 2x
Amount on Exit = $10 million
Equity stake = 10%

Then the investor will get
2x the investment = $ 2 million +
10% of the remaining $8 million = $800,000

So investor gets $2.8 million