Pre-money valuation

Also called: pre-money

In one line

What a company is deemed to be worth immediately before it takes in new investment in a round.

In plain English

Pre-money is the agreed value of the company before new money is added. Add the new investment and you get the post-money value. It sets the price per share for the round.

If you were explaining it to a 5-year-old

Before new friends put coins in the club jar, the club is 'worth' 100 coins. That starting number is the pre-money value.

Why it matters when you sell

Pre-money and the amount raised set the round's share price — a key reference point for what your shares might be worth today.

Put it to use

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Sources

A general market-practice term. See how we define and source the glossary in our methodology. General information, not advice.

Educational information only — not financial, tax or legal advice, and not an offer to buy or sell any security. Definitions are general; your own documents and local law govern your situation. PrivateTechShares is independent and not a broker or marketplace.

Pre-money valuation

Related terms

Put it to use