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$400k in exchange for 3% equity in his business, how much is his business worth?

User Kurt Kline
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1 Answer

4 votes

Final answer:

By dividing the investment amount of $400,000 by the 3% equity share, it is determined that the total business valuation is approximately $13,333,333.33.

Step-by-step explanation:

If someone is offering $400,000 for 3% equity in a business, we can calculate the total value of the business by dividing the investment amount by the percentage of equity. This is because the equity percentage represents a portion of the total value of the business. In this case, the equation would look like this: Total Value = $400,000 / 0.03.

To find the total value of the business we perform the calculation: Total Value = $400,000 / 0.03 = $13,333,333.33, which means the business is valued at approximately 13.33 million dollars.

User Mouser
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7.7k points
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