[kken]

>In a perfect market the company's new valuation is obviously 1.1 million dollars.

Why? It is still 1 million dollars. The only difference is that the owner now owns 0.9M$ worth of company shares and 0.1M$ cash.

[nadam]

I thought the money goes to the company, not the original owner. I think this is what pg suggested in the article.

[fragsworth]

If a company owns cash, and you own a percentage of that company, it is not really different from owning a percentage of that cash.

The rest of the company still has the same value, plus some (unclear) amount from having successfully raised money.