What Will the Current 1000 Shares in BoardX Inc Be Worth at the Time of IPO in Five Years?
Our mission is to pioneer a new way for teams to collaborate and co-create with AI, aiming to revolutionize the way collective innovation happens. To fulfill this mission, it is crucial to assemble the best talent and secure significant market capital. Based on these assumptions, we will undertake financial planning as follows:
- Equity Dilution: We anticipate offering 10% of our equity in each funding round (Seed, Series A, Series B, Series C).
- Valuations: The post-money valuations are projected at $20M, $50M, $100M, and $500M for the Seed, Series A, Series B, and Series C rounds respectively, reflecting the investment received for the 10% equity stake.
- Share Price: This will be determined by dividing the pre-money valuation by the total number of shares before issuing new shares at each funding stage.
- Stock Split: We plan a 1-for-10 stock split before the IPO to increase liquidity and accessibility of our shares.
- IPO Valuation: Our target IPO valuation is set at $10 billion USD.
- IPO Share Price: This price will be calculated from the IPO valuation divided by the total number of shares available after the stock split.
- Initial Shareholding: We will analyze the progression in the value of an initial 1,000-share holding through the funding rounds, the stock split, and up to the hypothetical IPO pricing.
| Funding Round | Investment for 10% Equity ($M) | Post-money Valuation ($M) | Pre-money Valuation ($M) | Price per Share ($) | New Shares Issued | Total Shares | Shares After Split (1-for-10) |
|---|---|---|---|---|---|---|---|
| Seed | 2.0 | 20.0 | 18.0 | 3.60 | 555,556 | 5,555,556 | - |
| Series A | 5.0 | 50.0 | 45.0 | 8.10 | 617,284 | 6,172,840 | - |
| Series B | 10.0 | 100.0 | 90.0 | 14.57 | 686,813 | 6,859,653 | - |
| Series C | 50.0 | 500.0 | 450.0 | 65.79 | 759,878 | 7,619,531 | - |
| IPO Split | - | - | - | - | - | 7,619,531 | 76,195,310 |
To calculate the value of the initial shares at the IPO, we also need the IPO price per share:
- IPO Valuation: $10 billion USD
- Total Shares After C Round: 7,619,531 shares
- Total Shares After 1-for-10 Split: 76,195,310 shares
To find the IPO price per share, we divide the IPO valuation by the total number of shares after the split:
- IPO Price per Share: $10 billion / 76,195,310 shares ≈ $131.21
Here's the summary for the initial shares post-IPO:
| Initial Shares Pre-Split | 1,000 |
|---|---|
| Initial Shares Post-Split (1-for-10) | 10,000 |
| IPO Price per Share | $131.21 |
| Value of Initial Shares at IPO | $1,312,100 |
This table and summary provide an understanding of the initial share value at the IPO, considering the new valuation and stock split.
The figures provided here are based on a series of financial projections and assumptions that are inherently subject to numerous uncertainties and contingencies. These calculations serve as a motivational target, painting a picture of what our collective efforts and dedication could potentially yield.
However, it is crucial to approach these projections with cautious optimism. The path to achieving our target valuation, particularly by the time we reach IPO, involves navigating a dynamic market, achieving milestones, and maintaining our competitive edge.
While aiming for a $10 billion IPO valuation is an inspiring goal, we need to acknowledge the legal and market conditions that may affect our journey. The actual equity dilution per round, share prices, and IPO valuation will be influenced by investor negotiations, market trends, and our performance at each stage of the company's growth.
Let's use these figures as a rallying point to continue our hard work and innovation, while also preparing to adapt our strategies as necessary in response to evolving business realities.
Together, we can strive towards making these projections a reality, keeping in mind the importance of flexibility and resilience in the fast-paced landscape of startups.
Best regards,
Usam
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