hard · Private Equity
A growth equity fund invests $8M in a company with a pre-money valuation of $32M. As part of the term sheet, the investor requires a 15% post-money option pool expansion to be carved out entirely from the pre-money valuation.
What is the effective ownership percentage of the founders immediately after the investment?
- 75.0%
- 68.0%
- 65.0%
- 80.0%
Sign up free to see the explanation and track your rank →
More Private Equity practice
- If the GP receives a 20% carry on the profit from Deal A immediately, and the fund eventua
- Following the investment, what is the investor's ownership percentage in the company, assu
- What is the Interest Coverage Ratio?
- A private equity firm is calculating a 'Public Market Equiva… — If the KS-PME score is 1.1
- A sponsor provides an 'Equity Cure' to a portfolio company. What is the standard purpose o
- What is the new effective conversion price for the growth equity investor?
- Which company will report a higher 'Gross Margin' and a higher ending 'Inventory' value on
- What is the company's Interest Coverage Ratio?