Pre-Money Valuation
Definition
Pre-money valuation is the negotiated value of a company before new investment is added.
How it comes up in fundraising
Term sheets quote pre-money; adding the round size gives post-money, from which everyone’s ownership follows.
Frequently asked questions
How is pre-money valuation set?
By stage norms, comparable recent deals, revenue multiples where metrics exist, and above all competition for the deal.
How does the option pool interact with pre-money?
Investors usually require the expanded pool inside the pre-money, so existing holders absorb that dilution; it is a negotiable point founders should model.
Round Funded resources
Cite this term
Round Funded. "Pre-Money Valuation." Startup Fundraising Glossary.
Stable URL, it will not change: https://www.roundfunded.com/en/glossary/pre-money-valuation
Related terms
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