Pre-money valuation

How it is used

Often shortened to pre or pre-money: we raised 2 million at an 8 pre. Founders must always check whether a number is pre-money or post-money, because the difference changes how much of the company they sell.

Example sentences

1. They offered 1 million at a 4 million pre-money valuation, so we would sell 20 percent.

2. Is that 5 million the pre-money valuation or the post-money?

Common collocations

• at a pre-money valuation of
• pre-money and post-money
• agree on a pre-money valuation

Related terms

• post-money valuationThe value of a company right after a funding round: the pre-money valuation plus the new money invested.
• valuationThe estimated value of a company, agreed between founders and investors in a funding round, which decides how much ownership investors get for their money.
• dilutionThe fall in an existing owner's percentage of a company when new shares are issued, for example to new investors or for an employee option pool.
• cap tableShort for capitalisation table: a list or spreadsheet that shows who owns what share of a company, including founders, investors, employees and options.

More terms: Equity & Valuation

• equity
• stake
• vesting
• stock option
• down round
• liquidation preference
• sweat equity
• option pool