Shen Venture Capital LLC plans to invest $400,000 in a new company ABC. It is targeting a 58% annual return for five years from now. ABC is expected to generate a net income of $500,000 at year 5. The price earnings multiple (PE) ratio of similar companies is 12times. Please provide calulations.
What is the venture’s exit value in year 5?
What is the post-money valuation?
What percent ownership of ABC Company that Shen Venture Capital LLC will get by investing $400,000?
What is the pre-money valuation?