Pre-Money and Post-Money Valuation Calculator
Calculate startup pre-money and post-money valuation, investor equity %, and founder dilution from a funding round.
Essential for founders and investors.
Pre-Money and Post-Money Valuation
When a startup raises a funding round, two valuations matter: the pre-money valuation (what the company is worth before the investment) and the post-money valuation (what it’s worth after the investment is added).
Formulas:
Post-Money Valuation = Pre-Money Valuation + Investment Amount
Investor Equity % = Investment / Post-Money Valuation
Founder Equity % = Pre-Money Valuation / Post-Money Valuation
Example:
- Pre-money valuation: $8,000,000
- Investment: $2,000,000
- Post-money valuation: $10,000,000
- Investor owns: $2M / $10M = 20%
- Founders retain: $8M / $10M = 80%
Price per share:
If you know the number of shares outstanding before the round:
Price per Share = Pre-Money Valuation / Shares Outstanding (pre-round)
New Shares Issued = Investment / Price per Share
Common term sheet negotiation points:
- Option pool shuffle: investors often require adding a new option pool to the pre-money valuation, which dilutes founders before the round closes
- Liquidation preference: investors may receive 1x or 2x their investment before founders receive anything in an exit
- Anti-dilution provisions: protect investors if a future round is at a lower valuation (down round)
Typical valuation benchmarks:
| Stage | Typical Pre-Money Range |
|---|---|
| Pre-seed | $1M – $5M |
| Seed | $3M – $15M |
| Series A | $10M – $50M |
| Series B | $40M – $150M |
Valuations vary enormously by sector, traction, team, and market conditions.
Key insight: The pre-money vs post-money distinction matters most when discussing ownership percentages — always confirm which valuation is being used when negotiating a term sheet.