Pre-money / Post-money Valuation

Definition

Pre-money is the company's value before funding; post-money is the value after. The difference is the amount you're raising.

Example Usage

The Series A had a $20M pre-money valuation, and we raised $5M, so our post-money valuation is $25M.

Origin

Venture capital mathematics, standardized in the 1990s.

Fun Fact

Confusing these two concepts has cost founders millions in lost equity.

Source: Venture capital finance terminology

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