6. on shark tank, if the entrepreneur is asking the sharks for $100,000 in exchange for 10% equity in the…

6. on shark tank, if the entrepreneur is asking the sharks for $100,000 in exchange for 10% equity in the business, what are they valuing the business at? 7. on shark tank, if the entrepreneur is asking the sharks for $200,000 in exchange for 5% equity in the business, what are they valuing the business at?

6. on shark tank, if the entrepreneur is asking the sharks for $100,000 in exchange for 10% equity in the business, what are they valuing the business at? 7. on shark tank, if the entrepreneur is asking the sharks for $200,000 in exchange for 5% equity in the business, what are they valuing the business at?

Answer

Explanation:

Step1: Recall business - valuation formula

Business valuation = (Amount of investment) / (Percentage of equity offered)

Step2: Calculate for first case

For asking $100,000 for 10% equity, Business valuation = $\frac{100000}{0.1}=1000000$ dollars

Step3: Calculate for second case

For asking $200,000 for 5% equity, Business valuation = $\frac{200000}{0.05}=4000000$ dollars

Answer:

For asking $100,000 for 10% equity, the business is valued at $1,000,000. For asking $200,000 for 5% equity, the business is valued at $4,000,000.