CMA Final · Entrepreneurship and Startup · Scalability, Scaling up and Stabilisation of Sustainable Business
A startup raised funds in Series A at a pre-money valuation of ₹40 crore, with new investors putting in ₹10 crore. What percentage of the company do the new investors hold immediately after the round?
The new investors hold 20%. Post-money valuation is pre-money ₹40 crore plus ₹10 crore invested, i.e. ₹50 crore, and ₹10 crore is one-fifth of that. Dividing by pre-money would wrongly give 25%.
- A25%
- B20%Correct
- C10%
- D30%
Explanation
Post-money valuation = 40 + 10 = ₹50 crore. Investor stake = 10/50 = 20%. The 25% option wrongly divides by the pre-money value (10/40).
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