Pre-money vs post-money calculator
See exactly how a round's valuation, amount raised, and investor ownership relate, and what your stake is worth on paper.
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Pre-money vs post-money
What it measures
The basic equation of venture capital. Pre-money is what the company is worth before the new cash arrives. Post-money is pre-money plus the investment.
When to use it
Every funding round. Founders often confuse the two. Raising $1M at a $4M valuation usually means $4M pre-money ($5M post-money), which implies 20% dilution.
Watch out for
Option pools. Investors often require the employee option pool to be created from the pre-money valuation, which dilutes only the founders, not the new investors.
Pre-money vs post-money
Startup valuation and ownership split.
How it works
Post-Money = Pre-Money + Amount Raised · Investor % = Amount / Post-MoneyPre-money is what the company is deemed worth before the new cash lands; post-money is that value plus the money itself. Investor ownership is always computed on post-money, which is why the distinction matters enormously in negotiation. '€2M at €8M' means 20% if the €8M is pre-money, but 25% if someone quietly meant post-money. The same three words, a five-point ownership swing.
Worked example
Raise €3M at a €12M pre-money valuation: post-money is €15M and the investor owns €3M ÷ €15M = 20%. A founder holding 50% before the round keeps 50% × 0.8 = 40%, worth €6M on paper. Had the €12M been post-money instead, the investor would own 25% and the founder 37.5%. Always pin down which number is on the table before shaking hands.
Common questions
Which matters more, pre-money or post-money?
They contain the same information once the raise amount is fixed, but ownership is calculated on post-money. Term sheets increasingly quote post-money precisely because it makes the investor's percentage unambiguous.
How does the option pool affect the math?
Investors usually require the employee option pool to be created or topped up inside the pre-money, meaning it dilutes founders, not the new investor. A 10% pool carved from the pre-money can cost founders more than the round itself; model it explicitly.
What valuation should a startup raise at?
The market answer: whatever credible investors will pay, typically anchored to traction multiples in your sector. Beware maximizing it: a too-high valuation sets a bar the next round must clear, and down rounds carry anti-dilution and signaling pain.
Last reviewed July 2026