Business

Roy Gallagher

8 October, 03:59

You founded your own firm three years ago. You initially contributed $200,000 of your own money and in return you received 2 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.

Assuming that this is the venture capitalist's first investment in your firm, what percentage of the firm will you own?

A) 50%

B) 40%

C) 33%

D) 25%