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What is Pre-money valuation?

Pre-money valuation: A company's value before new investment.

Where Pre-money valuation fits

Pre-money valuation is part of Investors & Plans in Entrepreneurship. Investors fund startups for equity. Angels invest early, VCs write bigger checks, and a term sheet outlines the deal. A business plan shows market and money model.

Practical tip

Know your valuation, your exit strategy and what you give up.

Related terms

Angel investor
A wealthy individual who funds early startups for a share.
Unicorn
A private startup valued at over a billion dollars.
Term sheet
A short document outlining the main terms of an investment deal.
Business plan
A document describing goals, market and how a business will make money.
Venture capital
Funding for risky startups in exchange for equity.
Exit strategy
A plan for how owners will eventually cash out, such as a sale or IPO.
Equity stake
A share of ownership in a company.
Convertible note
Debt that later turns into shares.

Formulas you will use with it

Money multiplierInvestor ownershipOwnership dilutionPost-money valuation

Test yourself

Which term means: “A company's value before new investment.”?

Term sheet · Pre-money valuation · Exit strategy

Answer: Pre-money valuation

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