The price per share and number of shares sold for each round are summarized in the table below.

Question

Six years​ ago, an entrepreneur owned​ 100% of their​ start-up company, with 4.8 million shares. The firm has since had four rounds of venture capital funding. The price per share and number of shares sold for each round are summarized in the table below.

Round Price per Share​ Number of Shares

Series A 1.17 1,200,000

Series B 1.48 1,440,000

Series C 4.08 662,400

Series D 9.89 600,000

What was the​ post-money valuation for the Series C funding​ round?

Answer=33.1 million how do I get this answer

Answer 1

The formula for post money valuation is amount of financing put in / percent of the business you purchased. This should intuitively make sense, if you pay $10 for 20% of the business, then 100% of the business is worth $50.

So lets start with the numerator .... in valuation round C, they put in $4.08 * 662,400 shares = $2,702,592

The denominator is the % of the business they purchased. We know they bought 662,400 shares. We also know the company started with 4.8M shares then did a valuation round and gave out 1.2M shares, then valuation round B with 1.44M shares and finally round C with 662,400 shares. For a total of 8,102,400 shares. In round C 662,400 of those shares were purchased or 8.17%.

Now we have the numerator and denominator to the original formula. They spent $2.7M to buy 8.17% of the business so 100% of the business is worth $33,057,792 or $33.1M rounded.