Pre Money Valuation Calculator
Calculate pre-money valuation before fundraising. Determine your startup’s worth before investor capital for negotiation and equity planning.
How the Pre Money Valuation Calculator works
Enter post-money valuation and investment amount, or use revenue multiples and comparable company data. Get pre-money valuation and founder equity retention.
Founders must know pre-money valuation before fundraising to negotiate fair terms. This determines how much equity you give up for capital raised.
How it works
Tutorial
Pre-money valuation is what your company is worth before investors add their money. It’s the key number in fundraising negotiations because it determines how much equity you give up.
Use the calculator above for instant results, or follow this guide to calculate manually.
The Formula
| Metric | Formula |
|---|---|
| Pre-Money Valuation | Post-Money Valuation – Investment Amount |
| Alternative Formula | (Investment ÷ Investor %) – Investment |
| Check Formula | (Investment ÷ Investor %) × (100% – Investor %) |
Step-by-Step Example
Investors want to invest $3M for 25% of your company. What’s your pre-money valuation?
Step 1: Identify What You Know
| Detail | Value |
|---|---|
| Investment amount | $3,000,000 |
| Investor ownership desired | 25% |
| Pre-money valuation | Unknown (we’re calculating this) |
Step 2: Calculate Post-Money Valuation
If investors want 25% for $3M, the post-money valuation is:
Post-money = Investment ÷ Ownership %
$3,000,000 ÷ 0.25 =$12,000,000
Step 3: Calculate Pre-Money Valuation
Pre-money = Post-money – Investment
$12,000,000 – $3,000,000 =$9,000,000
Your company’s pre-money valuation is$9 million
Step 4: Verify the Math
| Metric | Calculation | Result |
|---|---|---|
| Pre-money valuation | $9,000,000 | |
| + Investment | + $3,000,000 | |
| = Post-money valuation | $12,000,000 | |
| Investor ownership | $3M ÷ $12M | 25% ✓ |
Step 5: Calculate Ownership Breakdown
| Shareholder | Ownership % | Value |
|---|---|---|
| Existing shareholders (you) | 75% | $9,000,000 |
| New investors | 25% | $3,000,000 |
| Total | 100% | $12,000,000 |
Step 6: Compare Different Deal Terms
Same $3M investment at different ownership levels:
| Investor Gets | Post-Money | Pre-Money | You Keep |
|---|---|---|---|
| 20% | $15,000,000 | $12,000,000 | 80% |
| 25% | $12,000,000 | $9,000,000 | 75% |
| 30% | $10,000,000 | $7,000,000 | 70% |
| 35% | $8,571,429 | $5,571,429 | 65% |
Observation:For the same $3M, giving up less ownership means a higher pre-money valuation.
Step 7: Alternative Scenario – Know Pre-Money, Find Dilution
If your pre-money is $9M and you raise $3M:
Dilution = Investment ÷ (Pre-money + Investment)
$3,000,000 ÷ ($9,000,000 + $3,000,000) = $3M ÷ $12M =25%
What This Means
At a $9M pre-money valuation, a $3M investment gives investors 25% of your company. The higher your pre-money valuation, the less equity you give up for the same amount of money.
Negotiation tips:
- Pre-money valuation is the most negotiated term
- Justify higher valuations with traction, revenue, or growth
- Comparable companies’ valuations provide benchmarks
- Don’t optimize for highest valuation – get the right investor
- A $10M valuation from a great investor beats $12M from a bad one
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