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Despite having over 500k downloads and making $450k in revenue over the last 21 months, he had only $185k left in the bank, which meant that he would be out of business in 90 days if he didn’t raise more money. premoneyvaluation and planned to use the money to market the app. premoneyvaluation).
This implies a premoneyvaluation of $1.045M. See my breakdown of week 2 for more on how to calculate premoneyvaluation.). The premoneyvaluations on the two deals were close enough to be a wash, but the ability to accelerate the business at twice the speed would have been a real differentiator.
You're putting money in over the first 3-4 years, but you're not really seeing most of it back until years 7, 8, and 9, if not longer. Distributions can actually be drawn out over an extended period of time, but for the purposes of this exercise, I just kept the fund to 11 years. It's what you'd expect. Exits are $250mm.
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