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CA Final · Advanced Financial Management · Startup Finance

Payzen, a fintech startup, has 80 lakh shares outstanding held by its founders. A venture capital fund agrees to invest Rs 12 crore at a pre-money valuation of Rs 36 crore. What is the price per share at which the fund subscribes, and how many new shares are issued?

The fund subscribes at Rs 45 per share and receives about 26.67 lakh new shares. Price is pre-money value of Rs 36 crore divided by 80 lakh existing shares, and new shares equal Rs 12 crore divided by Rs 45. The resulting 25% stake matches 12/48.

  1. ARs 45 per share; 26.67 lakh new sharesCorrect
  2. BRs 45 per share; 80 lakh new shares
  3. CRs 60 per share; 20 lakh new shares
  4. DRs 36 per share; 33.33 lakh new shares

Explanation

Price per share = pre-money Rs 36 crore / 80 lakh shares = Rs 45. New shares = Rs 12 crore / Rs 45 = 26.67 lakh. Check: 26.67/(80+26.67) = 25% = 12/48, which matches the post-money of Rs 48 crore. Rs 60 would result from dividing the post-money value by the old share count.

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