Pre & Post-Money Valuation Calculator
From the pre-money valuation and the investment, compute the post-money valuation and the equity stake the investor receives.
Input Data
Results
At a glance:In a funding round, post-money valuation = pre-money valuation + investment; investor equity = investment ÷ post-money valuation. The pre-money is set before the cash; the post-money reflects the cash added.
Formula
Post-money valuation = pre-money valuation + investment.
Investor equity = investment ÷ post-money valuation.
$$PostMoney = PreMoney + Investment$$$$InvestorEquity = \dfrac{Investment}{PostMoney} \times 100\%$$How to Use
- Enter the pre-money valuation.
- Enter the investment amount.
- Read the post-money valuation and the investor equity share.
FAQ
What is the difference between pre-money and post-money valuation?
Pre-money valuation is the company's agreed value before the cash comes in; post-money = pre-money + investment, the value after the cash is added. Investor equity is the share of the post-money value. Always ask whether a quoted 'valuation' is pre or post — the resulting equity can differ a lot.
Why does the distinction matter so much?
Because the same phrase 'valuation of 10 million' means very different things. If pre-money, an investment of 2 million buys 2 ÷ 12 ≈ 16.7%; if post-money, it buys 2 ÷ 10 = 20%. A tiny wording difference changes the founder's dilution and the investor's influence materially.
Do option pools and convertible notes affect it?
Yes. This calculator covers only the simplest case. In practice the option pool is usually created before the round and dilutes founders further; convertible notes and SAFEs also affect final ownership at conversion. For those structures, get a professional financial and legal model.
How is the investor's equity percentage calculated?
Investor equity = investment ÷ post-money valuation × 100%, and the denominator must be the POST-money value, not pre. With pre-money HK$8m and investment HK$2m: post-money = 10m; equity = 2m ÷ 10m = 20%, founders diluted to 80%. Intuitively, the investor buys a slice of the HK$10m company after the cash is in, so divide by the post-money total. A larger investment share means higher equity and more founder dilution.
Is a higher pre-money valuation always better for founders?
For 'less dilution', a higher pre-money is indeed better for founders — the same HK$2m buys less equity, so founders keep more. But 'higher is always better' has costs. First, next-round pressure: too high a valuation this round forces stronger results next time or risks a down round, hurting morale and triggering anti-dilution. Second, harsher terms: high valuations often come with tougher protections (liquidation preference, ratchets) that may erode real control and exit value. Third, scaring off investors. So mature founders aim for a 'reasonable and sustainable' valuation, not the highest, balancing dilution against terms. For material rounds, seek professional advice.
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References
Content review: Calculatorism Finance Team. Results are for reference only; please refer to the relevant authorities for the official figures.