more updates

mba/ch30.org

@@ -62,5 +62,44 @@ PE * net_income = Value
 
 ** what is the company worth today
 - VC expects to make 50% per year
-- (Value of Company in 5 Years) / (1 + Percentage Earnings Per Year) ^ (Number of Years)
-- $10 mn / (1 + 50%) ^ 5
+- (Value of Company in 5 Years) / (1 + Expected Return Per Year) ^ (Number of Years)
+- $10 mn / (1 + 50%) ^ 5 = $1,316,872
+
+*** what does the vc get?
+- assume vc invests $1mn
+- investment / current value of company
+- $1mn / $1.32mn = 76%
+
+*** owner has
+- 100 - investors percentage = owners percentage
+  - 100 - 76 = 24
+  - owner has 24%
+
+*** what are the total number of shares
+- if the owner has 2 mn shares then
+
+- total shares = owners shares / owners percentage
+- total shares = 2mn / .24 = 8.3 mn
+
+- investor has 6.3 mn shares
+
+*** what is the share price
+- value per share = total investment / number of shares
+- value per share = $1mn / 6.3mn shares
+- value per share = 15.8c per share
+
+*** pre money valuation
+- what is the owners value in shares
+  - this is the value before we get any investment
+
+- owners share * price per share
+  - 2mn shares * 15.8c
+  - $316k
+
+*** post money valuation
+- Post-money valuation = Investment Amount + Pre-money valuation
+  - this is the value after the money is given by the vc
+
+- total number of shares * price per share
+  - 8.3mn shares * 15.8c
+  - $1.31m