A company's valuation immediately before a round closes — the number term sheets are negotiated around. Plain-language explainer with examples. Free to read.
A company's valuation immediately before a round closes — the number term sheets are negotiated around.
Pre-money is the valuation of the existing company before new investment. It sets how much of the company new investors will own: their ownership = amount invested / (pre-money + amount invested).
Pre-money is what founders and lead investors negotiate. Watch for option-pool expansion demanded pre-money — it comes out of the founder's ownership, not the new investor's.
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