What is the payoff to edwin the entrepreneur

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Question - Larry (LP) invests $100,000 in a VC fund run by Gary (GP). Gary is under 2/20 compensation plan. Interest does not accrue on the dividends. Gary invests $100,000 in a firm run by Edwin (Entrepreneur). The pre-money value of Edwin's firm is $400,000. In five years, the firm sells for $4,000,000.

Required -

a) What is the payoff to Edwin the Entrepreneur?

b) What is the payoff to Gary the General Partner?

c) What is the payoff to Larry the Limited Partner?

Reference no: EM132786563

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