Pre-Money vs Post-Money Valuation Calculator
Calculate startup valuation and understand investor equity ownership. See exactly what percentage investors get and how much dilution founders experience.
Company valuation before the new investment
New capital being raised
Employee stock option pool (usually 10-20%)
What is pre-money valuation?
Pre-money valuation is the company's value BEFORE receiving a new investment. It sets the price for the new investor's stake. Example: A company worth $5M pre-money that raises $1M will be worth $6M post-money, with the investor owning ~16.7%.
What is post-money valuation?
Post-money valuation is the company's value IMMEDIATELY after a funding round completes. It equals Pre-money + Investment amount. If a company raises $2M at $8M pre-money, its post-money valuation is $10M, and the investor owns 20%.
How is investor ownership calculated?
Investor Ownership % = Investment / Post-Money Valuation. Using the formula: Investor % = Investment / (Pre-Money + Investment). A $1M investment in a $4M pre-money company = 20% ownership ($1M / $5M = 20%).
What is an option pool and why does it matter?
The option pool is equity reserved for employee stock options (typically 10-20%). It's usually created BEFORE the investment, coming out of the pre-money valuation. This means existing shareholders get diluted by the option pool before the investor arrives, affecting founder ownership.
How does dilution work in funding rounds?
Dilution occurs when new shares are issued. If you own 80% and issue 20% new shares, you now own 80% of a larger pie but your actual value stake decreases. Founders can be diluted from 100% to 60-70% after a few funding rounds. Each round typically dilutes existing shareholders by 15-25%.
What is a good pre-money valuation?
Pre-money valuations vary by stage: Seed ($2-5M), Series A ($5-15M), Series B ($15-50M). It depends on market conditions, company traction, team, and comparable exits. Higher valuations mean less dilution for founders but may set unrealistic expectations.
What happens to share price in funding rounds?
Share price = Pre-Money Valuation / Total Shares Outstanding. After investment, the price-per-share increases (post-money value / new total shares). Understanding share price helps with option grants and understanding your ownership percentage.
How do I calculate my ownership after funding?
Your Ownership % = (Your Shares / Total Post-Money Shares) × 100. If you own 600,000 shares and there are 1,600,000 total after raising, you own 37.5%. Track your fully-diluted share count including all options to understand true ownership.