Pre and Post Money Valuation Calculator
Calculate your startup's pre-money and post-money valuations. This calculator helps entrepreneurs and investors understand company worth before and after funding rounds.
Current Valuation
Ownership Analysis
Valuation Results
Post-Money Valuation:
$0.00
Pre-Money Valuation:
$0.00
Valuation Status:
N/A
Ownership Dilution
Investor Ownership:
0.00%
Founder Dilution:
0.00%
Post-Round Ownership:
0.00%
Investment Metrics
Price per Share:
Shares Issued:
Investment Efficiency:
N/A
Understanding Pre and Post Money Valuation
Pre-money and post-money valuations are critical concepts in startup financing. They determine how much a company is worth before and after receiving investment, directly impacting ownership percentages and dilution for founders and early investors.
What are Pre and Post Money Valuations?
Pre-Money Valuation
- Company value before investment
- Based on current assets and potential
- Determines investor ownership percentage
- Negotiated between founders and investors
Post-Money Valuation
- Company value after investment
- Pre-money + investment amount
- Determines total company worth
- Used for future funding rounds
Valuation Calculations
Key Formulas
How valuations are calculated
Post-Money Valuation:
- Post-Money = Pre-Money + Investment Amount
- Includes the new capital injection
- Basis for ownership calculations
- Used in term sheet negotiations
Investor Ownership:
- Ownership % = Investment ÷ Post-Money Valuation
- Percentage of company investor receives
- Determines board seats and voting rights
- Key negotiation point
Ownership Dilution
Founder Dilution:
- Reduction in founder ownership percentage
- Occurs with each funding round
- Balanced against capital needs
- Long-term vs short-term trade-off
Employee Options:
- Shares reserved for employee compensation
- Typically 10-20% of total shares
- Dilutes all existing shareholders
- Important for attracting talent
Valuation Methods
| Method | Best For | Advantages | Limitations |
|---|---|---|---|
| Comparable Transactions | Later stages | Market-based, realistic | Limited data availability |
| Discounted Cash Flow | Revenue-generating startups | Forward-looking, comprehensive | Heavy assumptions required |
| Venture Capital Method | Early-stage startups | Exit-focused, simple | Speculative exit assumptions |
| Berkus Method | Pre-revenue startups | Qualitative factors, flexible | Subjective valuations |
Funding Round Considerations
Seed Stage:
- Pre-money: $2M - $10M
- Focus on product-market fit
- Higher risk, lower valuations
- Friends, family, angels
Series A:
- Pre-money: $10M - $30M
- Product-market fit achieved
- Focus on scaling
- Venture capital investment
Term Sheet Essentials
Key Terms:
- Pre-money and post-money valuations
- Investment amount and structure
- Ownership percentages
- Board composition
Protective Provisions:
- Liquidation preferences
- Anti-dilution protection
- Voting rights
- Exit rights
Valuation Negotiation Strategies
For Founders:
- Build strong traction metrics
- Develop competitive landscape
- Consider multiple term sheets
- Focus on long-term partnership
For Investors:
- Assess realistic growth potential
- Compare to market benchmarks
- Consider portfolio diversification
- Evaluate founder team quality
Key Takeaways for Startup Valuations
- Pre-money valuation is the company worth before investment, post-money includes the new capital
- Post-money valuation equals pre-money valuation plus the investment amount
- Investor ownership percentage is calculated as investment amount divided by post-money valuation
- Funding rounds cause ownership dilution for existing shareholders
- Employee option pools further dilute ownership but are necessary for talent acquisition
- Valuation methods vary by startup stage and available data
- Term sheets include valuation and many other important deal terms
- Successful fundraising requires balancing valuation with investor relationships