Pre-Money vs Post-Money Valuation: The Formula, a Worked Example and the Option Pool Trap
Pre-money valuation is what a company is agreed to be worth before new money goes in. Post-money valuation is what it’s worth straight after, which is the pre-money valuation plus the investment. If a business is valued at £4m and raises £1m, its post-money valuation is £5m and the investor owns 20%. The arithmetic is […]
The skinny
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