Educational estimates onlyNot financial or legal advice. Consult a startup attorney.
Pre vs post-money
Pre-money vs post-money valuation
The single most confused term in startup fundraising. This page explains it clearly with a live calculator. Same raise, different valuations, different dilution outcomes side by side.
Form ED-8 / Pre-Money vs Post-Money
Valuation worksheet
$
$
Post-money valuation
$19.00M
New investor ownership
21.1%
Founders retain
78.9%
Price per share
$1.50
New shares issued
2,666,667
§Worked example A
$2M raise at $8M pre-money
Post-money: $10M. Investor owns $2M / $10M = 20%. Founder ownership drops from 100% to 80% (assuming no option pool adjustments). Dilution: 20%.
§Worked example B
$2M raise at $18M pre-money
Post-money: $20M. Investor owns $2M / $20M = 10%. Founder ownership drops from 100% to 90%. Dilution: 10%. Same raise, half the dilution because of the higher pre-money.
§FAQ
Pre vs post-money FAQ
Pre-money valuation is the agreed value of the company before new capital is added. Post-money is pre-money plus the new raise. If pre-money is $20M and you raise $5M, post-money is $25M and the new investor owns $5M / $25M = 20%. The same $5M raise at a $30M pre-money makes the investor own $5M / $35M = 14.3%.