Pre and Post Money Valuation Calculator
Calculate pre-money and post-money valuation for startup funding rounds. Enter investment amount and equity percentage to determine company valuation instantly.
About This Calculator
The Pre and Post Money Valuation Calculator helps startup founders, investors, and entrepreneurs determine company valuation before and after a funding round. When an investor puts money into a company in exchange for equity, understanding these two valuation metrics is essential for fair negotiation.
The calculator uses the standard venture capital formula: Post-money valuation equals the investment amount divided by the investor's ownership percentage. Pre-money valuation is then calculated by subtracting the investment from the post-money valuation. For example, if a VC invests $2 million for 20% of a startup, the post-money valuation is $10 million and the pre-money valuation is $8 million.
Regional Notes
India: Startup valuations in India follow the same VC methodology. The calculator works with any currency — enter amounts in INR, USD, GBP, or any other currency. Indian angel networks and VC firms use pre-money valuation as the basis for term sheet negotiations.
US: Silicon Valley and US VC firms standardize around pre-money and post-money valuation terminology. Y Combinator and other top accelerators use this exact framework for safe notes and priced rounds.
UK: British VCs and angel investors use identical methodology. SEIS and EIS tax-advantaged investments also rely on pre-money valuation to determine equity allocation.
Frequently Asked Questions
What is pre-money valuation?
Pre-money valuation is the value of a company before it receives an investment. It represents what the business is worth based on its assets, revenue, traction, and growth potential prior to the funding round.
What is post-money valuation?
Post-money valuation is the value of a company immediately after it receives an investment. It equals the pre-money valuation plus the investment amount. This is the new total value of the company including the fresh capital.
How do you calculate post-money valuation from investment and equity percentage?
Post-money valuation is calculated by dividing the investment amount by the investor's equity percentage (as a decimal). For example, if an investor invests $25,000 for 5% equity, the post-money valuation is $25,000 / 0.05 = $500,000. The pre-money valuation is then $500,000 - $25,000 = $475,000.
What is the difference between pre-money and post-money valuation?
Pre-money valuation is the company's worth before investment, while post-money valuation is the worth after investment. The difference is the investment amount itself. Post-money valuation always equals pre-money valuation plus the investment amount.
Why is pre-money valuation important for startups?
Pre-money valuation determines how much equity founders give up for a given investment. A higher pre-money valuation means less dilution for existing shareholders. It is a key negotiation point between founders and investors during funding rounds including seed, Series A, and beyond.
Can pre-money and post-money valuation be negative?
No, both pre-money and post-money valuations represent the value of a company and cannot be negative. A company's valuation can be zero in theory but never negative since it represents ownership value.
Is the Pre and Post Money Valuation Calculator free?
Yes, it is completely free to use with no registration required. Your inputs are saved in the URL so you can share your calculation with investors or co-founders.