Example

Investor : Invests $ 1 million

Requires ROR of 50%

Wants out in 5 years

Company projections

Profit in Year 5 $2.5 million

Comparable P/E 15

Investors stake

Future Value of Investment = $1 m * (1.5)5 = $7.59 m = 20.24%

Future Value of Company $2.5 m * 15 $37.5 m

$1 million =20% Then the Value of the company is $ 5million

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