FundraisingAdvanced

Pre-money / Post-money

Also known as pre money, post money, pre-money valuation, post-money valuation

Pre-money is what your company is valued at before the new investment; post-money is that plus the money coming in. The difference decides how much of the company the investor gets.

Example

₹9Cr pre-money plus a ₹1Cr investment is ₹10Cr post-money, so the investor owns 10%.

Formula

Post-money Valuation = Pre-money Valuation + Investment Amount

Related terms

Cap Table

A list of everyone who owns a piece of the company — founders, investors, employees with options — and how much each holds.

Valuation

How much your company is judged to be worth. 'Pre-money' is the value before new investment; 'post-money' is pre-money plus the money raised.

Dilution

When new shares are issued (to investors or employees), each existing owner's percentage of the company shrinks — even though the company is usually worth more overall.

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