Clarifications on Venture Capital

November 30, 2005 by Dane | 1 Comment
In Financing

Dave Taylor gives a few simple clarifications on Venture Capital and provides some good links to read more about it:

A common scenario, however, is for a VC to buy 20% of a company, where that might look like this:
• pre-money company valuation: $5 million
• VC investment: $1 million
• post-money company valuation: $6 million
• founder equity stake: 80%
• VC equity stake: 20%

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