20,000.

Five million dollars.

We know that it is a large city, but we may be unsure about exactly how many people live in the city.

Now we're in the 1,000,000's place.

I have 1 10 of ten million as opposed to 1 5 of five million.

So let's think about it a couple ways.

Lost 5 million.

So let's say we say need 5 million from the angel investor to get started.

We'll have 5 million in cash.

These guys are New World primates, which means they broke off from the human branch about 35 million years ago.

That's not a trick question.

The whole point of this was to start a business.

He had originally given us 5 million.

And then all you have left is 5 million for this guy.

So the shareholders' equity, or you could almost say the book value of the equity of the company, is 5 million. 5 million equity.

But then comes the ask, where you tell me how much you want.

I think this company is actually only worth 5 million.

All right, you get your 5 million.

And there's 1 million shares.

Let me make the pointer smaller.

And in the 5 per share world, what we did was we issued another million shares and sold them for 5 million.

I had some debt.

Let's just say it's all of it.

That's worth 5 million, right?

Wait a minute! Five million yen!

17½... minus the half for wasting my time.

And we're valuing it at six million because I have a million here and five million here times six million.

And that's why scale counts.

He valued what we already had at 5 million dollars.

They're worth 5 million.

So this is interesting.

20,000. That's a little steep.

We got 10, 20, 30 44, five each.

Well, it's the debt holders get first dibs.

In the year 2000, a rather interesting thing happened.

We didn't pay down any of the principal of the debt.

We went to an angel investor.

Undo.

I don't know, depending on how many expenses we have.

That's the idea.

Maybe if you had a chimpanzee with you.

So I'm graphing here and we only had to go through 100 trials.

Say it a million times.

And so this leads to a process of valuation.

So if this idea we agree with the angel investor if we agree this is worth 5 million.