With these two variables entered, our little gizmo would measure the pre and post money valuation of your company based on the pre and post-money valuation formula. Using this, we can calculate how much each share is worth by dividing the Post-money valuation by the total number of shares. So, if a pre-revenue startup had a pre-money valuation of 1 million€ and then received seed capital of 500,000€, the initial post-money valuation would be 1.5 million€. Suppose an investor wants to inject $40,000 into your business, and you both agree that the company is worth $100,000. Number of shares outstanding: the total number of shares outstanding before the converting round; First we will work out which Valuation to use. Pre-money valuation = Post-money valuation - investment amount Let's use the example from above to demonstrate the pre-money valuation. The pre and post-money valuation calculator allows a startup business to enter the amount of investment required and the percentage of equity in the business they are prepared to sell to the investor and then calculates the pre-money and post-money valuation based on these inputs. Thus, to calculate pre-money valuation, we use equation (1) as we now know the post-money valuation and the investment amount: Pre-money valuation = $10MM – $3MM = $7MM. The company will raise $27 million of new equity at the pre money valuation of $50 million, which results in it issuing 540,000 new shares. The Post-money valuation is the sum of the pre-money valuation and the money raised in a given round. You need to understand the valuation of $10 million holds true only after the investor has invested in the money. The stimulus check calculator computes how much money you are eligible to receive from the coronavirus checks promised by the US government. Following our post on “how to calculate your pre-money valuation – the formula” we offered a simple formula as a solution. These inform you on the pre and post money. The Pre-money valuation is equal to the Post-money valuation minus the investment amount – in this case, $80 million ( $100 million - $20 million). It would reveal both the pre-money and post-money valuation of the company in question. The High Tech Startup Pre-Money Valuation Calculator. The reason I spelled them out again is I want to deduct the ESOP from the pre money. The questionnaire was a little tiring..but the questions really make you think about what increases your pre-money valuation. Need some help? What implications does valuation have to dilution? It is best explained as how much a startup could be valued before it begins to obtain any venture capital into the company. Pre-money value has the single biggest impact on determining the percentage of a company an investor is going to acquire for a given investment (and, as a result, what percentage of the company the existing stockholders will retain). Pre-money and post-money valuation play a central role in the fundraising process. Wondering what your Pre-Money Value will be if a VC ever puts a term sheet on the table? It is a simple to use tool, all you have to do is input two variables that are required for the process of calculation. Ownership. Solution: Pre-money valuation: 6000,000 shares * $ 4 = $ 24,000,000; Post Money Valuation: (6000, 000 + 1000, 000) shares * $ 3. Let’s assume an investor invests $33 and the respective percentage for that investment in the company is 1%. Investor's equity % Calculate Pre and Post Money Evaluation . In the pre-money method, the pre-money valuation of the company is fixed and the conversion price for the notes or Safes is determined based on that. The tool has been developed in consultation with Venture Capitalists and Angel investors and uses industry standards to calculate the Valuation. They get the $4 price per share at a 20% discount, giving them 312,500 shares which dilutes all the existing stakeholders including the new series investors. Easy to use, and there is other calculators on the site as well. This value measurement does not just give venture capitalists an idea of the current worth of the business, it also provides the value of each issued share. If you need help with pre-money valuation, you can post your question or concern on UpCounsel's marketplace. So, we know that the pre-money value of the company stood at $23million\$23 \mathbf{\small{million}}$23million. The pre-money valuation is fixed, so the incoming investors purchase their shares at $4 each. This tool is actually worth counting on. The per-share offering price in consultation with Venture Capitalists and Angel investors and industry. 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