Definition
What is pre-money and post-money valuation?
Pre-money valuation is what a company is worth before new investment; post-money valuation is pre-money plus the new money raised. An investor's ownership is their investment divided by the post-money valuation.
Example: raising $2M at an $8M pre-money valuation gives a $10M post-money valuation, so the new investors own 20% of the company.
Common questions
How do you calculate post-money valuation?
Post-money valuation = pre-money valuation + new money raised. New investors own their investment divided by the post-money valuation.
General information, not legal, tax or investment advice.