Full Definition
Post-money valuation is the estimated value of a company immediately after a funding round is completed. It equals the pre-money valuation plus the total amount of new capital invested.
Formula: Post-Money = Pre-Money + Investment Amount
Post-Money SAFEs
Y Combinator introduced "post-money SAFEs" in 2018, where the valuation cap represents the post-money valuation including the SAFE itself. This simplifies dilution calculations for founders and investors alike.
Why It Matters
Post-money valuation directly determines what percentage of the company each investor owns. Founders should understand both pre-money and post-money valuations to accurately calculate dilution and negotiate fair terms.
Real-World Example
After raising $3M at a $12M pre-money valuation, the startup's post-money valuation is $15M.
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Related Terms
The value of a company before receiving new investment in a funding round.
The estimated monetary worth of a company, determined through various methods and negotiations.
A Y Combinator-created investment instrument that converts to equity in a future priced round.
The reduction in existing shareholders' ownership percentage when new shares are issued.
A spreadsheet showing the equity ownership, dilution, and value of shares in a company.
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