Pre-Money Valuation
Also called Pre-Money
A company's valuation just before an investment goes in. Add the new money and you get the post-money valuation.
Why it matters
Pre-money is the number founders and investors actually negotiate, because it sets how much of the company the new money buys. A small change in it can mean a real change in your ownership.
For example
The founders and the lead negotiate a 20 crore pre-money valuation; add the 5 crore being raised and the company is worth 25 crore right after.
Go deeper
Related terms
Also in Starting Up
See how founders actually handle this on Raising your first round, part of the Starting Up hub.
eChai Partner Brands
