Valuation and returns
Pre-money and post-money calculator
Investors often talk in "we put in $2 million for 20%". This turns that into a pre-money valuation, a post-money valuation and a share price.
Fully diluted shares should include all issued shares, granted options and the unallocated pool. SAFEs and notes converting in the round are not included here.
How it works
Post-money valuation is what the company is worth right after the investment: the amount raised divided by the stake the investors get. Pre-money is that figure minus the new money.
The price per share is the pre-money valuation divided by the fully diluted share count before the round. New shares issued are the shares that give investors their stake at that price.
The formula
- Post-moneyPost-money = amount raised / stake sold.
- Pre-moneyPre-money = post-money - amount raised.
- Share price and new sharesPrice = pre-money / fully diluted shares; new shares = shares x stake / (1 - stake).
Worked example
Raising $2 million for 20% gives a $10 million post-money and an $8 million pre-money. With 8 million fully diluted shares, the price is $1.00 and the company issues 2 million new shares.
Put the numbers in your data room
Put a pro forma cap table showing the round at this price next to the current cap table in the data room. It is the first file the lead investor's counsel checks.
Pre-money and post-money calculator FAQ
Is valuation pre-money or post-money?
Both are used. Term sheets usually state pre-money; SAFEs often state a post-money cap. Always ask which one is meant.
Why does the share count matter?
The price per share depends on the fully diluted count. Leaving out options or the pool overstates the price.
What does fully diluted mean?
All issued shares plus all options, warrants and the unallocated pool, as if everything were exercised.