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CMA Final · Entrepreneurship and Startup · The Entrepreneurial Ecosystem

Tarun founded a logistics-tech startup. Investor A put in funds at a pre-money valuation of Rs 18 crore, investing Rs 6 crore in the round. What percentage of the company does Investor A hold immediately after the round, and what is the post-money valuation?

Post-money valuation is pre-money Rs 18 crore plus the Rs 6 crore invested, giving Rs 24 crore. The investor's stake is 6 divided by 24, which is 25%. Dividing by the pre-money value would wrongly give 33.33%.

  1. A25% and Rs 24 croreCorrect
  2. B33.33% and Rs 18 crore
  3. C25% and Rs 18 crore
  4. D33.33% and Rs 24 crore

Explanation

Post-money valuation = pre-money 18 + investment 6 = Rs 24 crore. Investor stake = 6/24 = 25%. Using 6/18 = 33.33% wrongly divides by pre-money, and keeping Rs 18 crore as post-money ignores the new cash.

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