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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.

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