Startup Dictionary
Post-Money Valuation
Definition
The value of a company after an investment has been made.
Deep Dive
Post-money valuation represents the total value of a company immediately *after* a new round of investment has been completed. It is calculated by adding the amount of the investment to the company's pre-money valuation. This figure is crucial for both investors and founders, as it directly impacts the percentage of ownership an investor receives for their capital infusion and reflects the company's updated market perception and worth following a successful fundraising event.
Examples & Use Cases
- 1A company with a $20M pre-money valuation raises $5M; its post-money valuation is $25M
- 2An investor puts $2M into a startup, receiving 10% equity, which implies a $20M post-money valuation
- 3After a $15M investment round, a company's total worth is assessed at $75M.
Related Terms
Pre-Money ValuationDilutionEquity