Corporate finance Equity Shares Issued (in practice)
So my company is raising capital. We are dealing with investors and have agreed upon a $5 million pre-money valuation. Based on the number of shares outstanding, the current share price works out to $0.3931 or a more precise calculation is $0.39306229
A new investor is coming in and wants to give the company $200,000, how many shares will they get? In excel the calculation says 508,825 but on the term sheet the amount is a bit less (508,776) based on $0.3931.
How many shares should the investor be getting? If we change the share price and round then the company value is slightly more than $5 million. How does this get reconciled in practice? (The company is private obviously)
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