Please answer parts A and BHomework Answers
a-1). New Total Number of shares = Founder's Shares / [1 - Ownership% desired by venture capitalist]
= 8 million / [1 - 0.20] = 8 million / 0.80 = 10 million shares
Shares Owned by Venture Capitalist = New total number of shares - Founder's shares
= 10 million - 8 million = 2 million
a-2). Implied price per share = Invested Amount by venture capitalist / Shares Owned by Venture Capitalist
= $1 million / 2 million = $0.50 per share
b). Post-money Valuation = Implied price per share * New Total Number of shares
= $0.50 * 10 million = $5 million
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