Pre-Money and Post-Money Valuation Calculator

How to use the valuation calculator

1. Investment amount: the new money going into the company in this round.
2. What else do you know? Pick the number you were quoted. An investor might say "$4 million pre", "$5 million post" or "$1 million for 20%". All three describe a deal, and any one of them is enough.
3. Enter that number. The calculator works out the other two.
4. Shares before the round (optional): every share that exists today, including any option pool. Add this to see the price per share and how many new shares get issued.

The result shows the post-money valuation, the pre-money valuation, what the investor owns and what the existing holders keep. For the plain-language difference between the two terms, see pre-money vs post-money valuation.

The pre-money and post-money formulas

You can run the same sums backward. If you only know the ownership the investor wants, post-money valuation = investment / investor ownership, and pre-money is that minus the investment. If you know the post-money figure, subtract the investment to get pre-money.

A worked example

Say an investor offers $1,000,000 at a $4,000,000 pre-money valuation, and your company has 8,000,000 shares today.

Now suppose the investor had said "$4,000,000" and meant post-money. Switch the dropdown to post-money valuation and enter $4,000,000. Pre-money drops to $3,000,000, the investor owns 25% and the price per share falls to $0.375. One word moved five percentage points of your company.

How to read the result when you get an offer

• Ask "pre or post?" every time. Get the answer in writing on the term sheet. In the example below, that one word is the difference between selling 20% and selling 25%.
• Think in ownership, not headline value. A bigger valuation feels good, but what you live with is the share you keep and the money you get to work with.
• Check what counts as "shares before the round". If the investor wants a larger option pool created first, those shares come out of the existing holders' side, which lowers the real price per share.
• Count SAFEs and notes. If you raised on a SAFE earlier, it converts in this round and takes its slice from the existing holders. Run the SAFE note calculator first.
• Look past this round. Each later round dilutes you again. The equity dilution calculator shows the running total, and a cap table keeps it honest.

A valuation at the early stage is a negotiated number, not a measured one. What moves it is evidence: customers you have talked to, a market you can size, and early revenue. A sourced TAM SAM SOM estimate and a clear pitch deck give you something firmer to negotiate with than a number you hope for.

What the calculator leaves out

• It does not tell you what your company is worth. It only turns one agreed number into the others. Setting the valuation is a negotiation.
• Option pool changes. A pool created or enlarged as part of the round changes the share count and the effective price.
• SAFEs and convertible notes converting. Their shares are issued in the round and dilute existing holders on top of the new money.
• Share classes and terms. Liquidation preferences, anti-dilution rights and similar terms change what a stake pays out, even when the percentage looks the same.
• More than one investor or closing. Enter the total new money for the round. The split between investors is in proportion to what each one puts in.
• Tax and legal effects. These depend on your country and company type. Ask a lawyer or accountant who works with startups before you sign.

If you are still a long way from a funding round, that is normal. Most of the work that earns a fair valuation happens earlier: picking the idea, testing it with real customers and writing the plan. Fonda walks you through those steps in order and reaches a Raise step once the groundwork is done. You can read example plans at /tools/business-plan.