Pre-Money Valuation
A pre-money valuation refers to the value of a company before it goes public or receives other
investments such as external funding or financing. Put simply, a company’s pre-money valuation is how
much money it is worth before anything is invested into it. The term, which is also simply referred to as
pre-money, is often used by venture capitalists and other investors who aren’t immediately involved in a
company. This figure allows them to determine what their share in the company is, based on how much
they invest.
- Pre-money valuation is the value of a company before it goes public or receives other investments
such as external funding or financing. - Potential investors can use the pre-money value of a company to determine how much it’s worth
before they invest their money - Pre-money valuations are different from post-money valuations, which determine a company’s
worth after it receives funding or financing.
Pre-Money Valuation = Post-Money Valuation – Investment Amount