Question
What is the difference between pre-money and post-money valuation?
Pre-money valuation is the agreed company value before the new investment. Post-money valuation is the company value immediately after the new investment is included.
The core formula is simple: post-money valuation equals pre-money valuation plus the new investment. If a company raises $2,000,000 on a $10,000,000 pre-money valuation, the post-money valuation is $12,000,000.
That post-money number is what usually makes ownership math easier. In the same example, the investor's simplified ownership is $2,000,000 ÷ $12,000,000, or 16.67%.
Why founders get tripped up
- They compare offers using only the headline pre-money number and miss how much ownership is being sold.
- They mix pre-money and post-money SAFE language with priced-round language.
- They ignore share-count assumptions such as fully diluted shares and option pool treatment.
Use the calculators
For quick percent-sold math, use the Simple Pre/Post-Money Calculator. For share price, investor shares, and fully diluted share assumptions, use the Full Pre/Post-Money Valuation Calculator.
Methodology and limits
This explainer uses the basic priced-round identity: post-money = pre-money + investment. It does not model legal document variations, liquidation preferences, warrants, option-pool negotiations, or securities-law consequences.
Educational-use disclaimer: This page is for educational planning only. It is not legal, tax, accounting, investment, securities, financial, or fundraising advice. Review actual financing documents with qualified counsel and advisors.
Last reviewed July 21, 2026. See Methodology and Sources.