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Post-Money Valuation

Private Equity glossary · Private Equity Fundamentals

Definition

Company valuation after a financing round (pre-money + new investment).

Post-Money Valuation in plain English

When a startup raises money, investors give it cash in exchange for a slice of ownership — and to figure out how big a slice, everyone first agrees on what the whole company is worth. Post-money valuation is that worth measured right AFTER the new money lands: it's the value the company had before the round (called pre-money) plus the fresh cash just invested. So if a company was judged to be worth $8 million and an investor puts in $2 million, the post-money valuation is $10 million. It matters because the investor's ownership percentage is their check divided by that post-money number — here, $2 million of $10 million, or 20% of the company.

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Following the investment, what is the investor's ownership percentage in the company, assuming no option pool was…

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