Calculate Your Company Valuation After VC Funding
Post-money valuation calculator helps founders, investors, and stakeholders understand company value after receiving venture capital investment. This calculator uses investment amount and equity percentage to determine post-money valuation, pre-money valuation, and price per share. Understanding these fundamental metrics enables better negotiation, ownership planning, and fundraising strategy.
Post-Money Valuation
$25.0M
Pre-Money Valuation
$20.0M
Price Per Share
$3
With a $5,000,000 investment for 20% equity, your post-money valuation is $25,000,000. This implies a pre-money valuation of $20,000,000, meaning investors are valuing your existing company at that amount before their capital injection.
Post-money valuation represents your company's total value immediately after receiving an investment. It's calculated by dividing the investment amount by the equity percentage given to investors. This metric is crucial for understanding how much of your company you're selling and at what implied valuation.
The pre-money valuation (post-money minus investment) reflects how investors value your existing business before their capital. A higher pre-money valuation means less dilution for existing shareholders. Understanding these metrics helps founders negotiate better terms and plan for future funding rounds.
Post-Money Valuation
$25.0M
Pre-Money Valuation
$20.0M
Price Per Share
$3
With a $5,000,000 investment for 20% equity, your post-money valuation is $25,000,000. This implies a pre-money valuation of $20,000,000, meaning investors are valuing your existing company at that amount before their capital injection.
Post-money valuation represents your company's total value immediately after receiving an investment. It's calculated by dividing the investment amount by the equity percentage given to investors. This metric is crucial for understanding how much of your company you're selling and at what implied valuation.
The pre-money valuation (post-money minus investment) reflects how investors value your existing business before their capital. A higher pre-money valuation means less dilution for existing shareholders. Understanding these metrics helps founders negotiate better terms and plan for future funding rounds.
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Post-money valuation is one of the most fundamental concepts in venture capital financing, representing the total value of a company immediately after receiving an investment. The formula is elegantly simple: divide the investment amount by the equity percentage given to the investor. A $5 million investment for 20% equity implies a $25 million post-money valuation because the investor is paying $5M for one-fifth of the company. This calculation reveals how investors perceive your company's total worth and directly determines how much of your company you're selling. Understanding post-money valuation enables founders to negotiate from a position of knowledge, evaluate term sheets objectively, and plan for future funding rounds with realistic ownership expectations.
Pre-money valuation, calculated by subtracting the investment amount from post-money valuation, represents what investors believe your existing company is worth before their capital injection. In our example, a $25M post-money minus $5M investment equals a $20M pre-money valuation. This metric is crucial because it reflects investor confidence in your current business, team, and market opportunity. Higher pre-money valuations mean existing shareholders retain more ownership after the round closes. Founders negotiating a seed round at $8M pre-money versus $12M pre-money will own significantly different percentages after identical investment amounts, with compounding effects through subsequent rounds. The pre-money versus post-money distinction is essential for comparing term sheets and understanding the true cost of capital.
Multiple funding rounds create compounding dilution that makes early-stage valuation decisions increasingly important for long-term founder ownership. A founder who starts with 100% and raises seed funding at a $10M post-money giving up 20%, then Series A at $40M post-money giving up 25%, then Series B at $150M post-money giving up 20%, will own substantially different percentages depending on anti-dilution provisions, option pool expansions, and participation rights. Understanding post-money mechanics at each stage enables realistic cap table modeling and helps founders set ownership targets for different exit scenarios. Price per share calculations derived from post-money valuation divided by total shares provide standardized metrics for comparing across different share structures and facilitating employee equity conversations.
Early-stage startup raising $2M seed round from angel investors and VCs.
Post-money valuation of $10M ($2M / 20%), pre-money valuation of $8M, and $1.00 price per share. Founders retain 80% ownership after this round.
Growing startup raising $10M Series A to scale operations and expand team.
Post-money valuation of $40M ($10M / 25%), pre-money valuation of $30M, and $2.00 price per share. The 25% dilution is typical for Series A rounds.
Scaling company raising $25M Series B for market expansion and product development.
Post-money valuation of $125M ($25M / 20%), pre-money valuation of $100M, and $5.00 price per share. Strong pre-money reflects proven traction and growth metrics.
Mature startup raising $50M late-stage round ahead of potential IPO.
Post-money valuation of $500M ($50M / 10%), pre-money valuation of $450M, and $10.00 price per share. Lower equity percentage reflects company maturity and reduced investor risk.
Pre-money valuation is what your company is worth before receiving an investment, while post-money valuation is the total company value immediately after the investment. Post-money equals pre-money plus the investment amount. For example, if investors put in $5M and receive 20% equity, the post-money valuation is $25M ($5M / 20%), and the pre-money valuation is $20M ($25M - $5M). This distinction is crucial because it determines how much of your company you are actually selling. When negotiating, founders should focus on pre-money valuation since that reflects the value assigned to their existing work, while investors often think in terms of post-money since that determines their ownership percentage.
Price per share is calculated by dividing the post-money valuation by the total number of fully-diluted shares outstanding after the round. For example, with a $25M post-money valuation and 10 million total shares, the price per share is $2.50. This calculation typically includes all outstanding common stock, preferred stock (on an as-converted basis), vested and unvested options, and any shares reserved in the option pool. The price per share is important for several reasons: it sets the strike price for new employee options, determines the value of existing equity holders stakes, and provides a standardized way to compare ownership across different share structures. When negotiating, be aware that investors may request an increase in the option pool before the round (pre-money option pool expansion), which effectively reduces the pre-money valuation and increases dilution for existing shareholders while maintaining the stated price per share.
Dilution compounds across funding rounds, which is why understanding post-money valuation at each stage is crucial for long-term ownership planning. Starting with 100% ownership, if you raise a seed round giving up 20%, you retain 80%. If you then raise a Series A giving up 25%, your ownership becomes 80% x 75% = 60%. A Series B at 20% dilution reduces you to 60% x 80% = 48%. This compounding effect means small differences in early-stage dilution have significant long-term impacts. Additionally, option pool expansions typically happen before each round (from pre-money), further diluting existing shareholders. Founders should model ownership through exit scenarios to set realistic expectations and negotiate appropriately at each stage.
While every deal is unique, typical equity ranges exist for each funding stage. Seed rounds typically involve 15-25% dilution with 20% being common. Series A rounds often range from 20-30% with 25% being typical. Series B rounds usually fall between 15-25% as companies have more leverage from proven metrics. Later stages (Series C and beyond) typically see 10-20% dilution as risk decreases. These percentages depend heavily on company traction, market conditions, competitive dynamics in the fundraise, and investor demand. Hot companies with multiple term sheets can negotiate lower dilution, while those with fewer options may need to accept higher percentages. The option pool expansion requested by investors (typically 10-15% for early stages) also affects effective dilution.
Liquidation preferences can significantly impact what founders and employees actually receive in an exit, making headline post-money valuation less meaningful in some scenarios. A 1x non-participating preference means investors get their money back first before common shareholders receive anything. Participating preferences allow investors to get their money back AND share in remaining proceeds. In a $25M post-money company that exits for $30M with $5M invested at 1x participating preferred, investors would get $5M plus 20% of the remaining $25M ($5M), totaling $10M, while common shareholders split only $20M. In downside scenarios where exit value is below or near total invested capital, high liquidation preferences can leave founders with little despite seemingly high valuations. Always understand the full terms, not just the headline valuation number.
Founders should negotiate on pre-money valuation because it directly determines how much of your existing company you are selling. The pre-money represents the value investors place on your work before their capital arrives. When an investor proposes a post-money valuation, immediately calculate the implied pre-money by subtracting their investment amount. A $30M post-money with a $10M investment means a $20M pre-money, while a $25M post-money with a $5M investment also implies a $20M pre-money despite the lower headline number. Also watch for option pool manipulation - investors may request increasing the option pool pre-money, which effectively reduces your pre-money valuation while keeping the headline number unchanged. Always run the full cap table math to understand true ownership implications.
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