Post-Money Valuation
The value of a company immediately after receiving new investment, calculated as pre-money valuation plus the investment amount.
What is Post-Money Valuation?
Post-money valuation is the total value of your company after the new capital is added. It's a simple calculation: pre-money valuation plus the investment amount.
Post-money valuation is what most people mean when they say a company is "valued at $X." It includes the fresh capital in the company's total worth.
The post-money valuation sets the benchmark for your next round. If you raise a Series A at a $20M post-money, your Series B will need to be at a higher valuation for it to be considered an "up round."
Why it matters
Post-money valuation is the denominator when calculating investor ownership. An investor who puts in $3M at a $15M post-money valuation owns exactly 20%. This clarity makes post-money a cleaner number for cap table math.
It also sets expectations for the next round. Your post-money from this round becomes a reference point, and if your next round's pre-money is lower than this round's post-money, that's a down round.
Formula
Post-Money Valuation = Pre-Money Valuation + Investment Amount Investor Ownership = Investment Amount / Post-Money Valuation
Example
Pre-money valuation is $18M. Investors put in $4.5M. Post-money = $22.5M. Investors own $4.5M / $22.5M = 20%. If the company raises a Series B at $30M pre-money, that's a 33% increase over the Series A post-money, a healthy up round.
Common mistakes
- 1Comparing post-money valuations across rounds without accounting for dilution from option pools
- 2Assuming post-money valuation reflects the actual market value of the company (it reflects the price of the last round)
- 3Not realizing that a SAFE with a valuation cap sets the post-money for conversion purposes
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