What is value of company with staging

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1. You need financing for your startup for a total of $50M. Of this amount, you need $20M right now and you can wait one year for the remainder $30M. Next year, news about product development prospects will have come out. Probability of good news is 70% with certain payoff of $250M. Probability of bad news is 30% with 10% chance of success (payoff $250M) and 90% chance of complete failure of product.

What is value of company with staging? Without staging? Why is value different? What is the VC ownership and founder ownership if funding is not staged?What is VC ownership and founder ownership if funding is staged?

2. Suppose you need a total of $100M in financing, $40M of which is needed right away and remainder in one year. Next year, news about product development prospects will have come out. Probability of good news is 80% with certain payoff of $400M. Probability of bad news is 20% with 10% chance of success (payoff $400M) and 90% chance of complete failure of product.

What is value of company with staging? Without staging? Why is value different?What is the VC ownership and founder ownership if funding is not staged?What is VC ownership and founder ownership if funding is staged?

Reference no: EM131360446

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