Pre-money valuation is the value assigned to a company immediately before it receives new investment in a funding round. It is the most negotiated number in a priced round because it directly determines how much of the company investors receive. Post-money valuation equals pre-money plus the investment amount, and investor ownership equals their investment divided by the post-money valuation.
By Pitchkit · Last Updated October 10, 2026
Pre-money valuation determines how much of the company investors get for their money. It is the single most negotiated number in a priced round, since every other term flows from it.
Post-money equals pre-money plus new money. Investor ownership percentage equals their investment divided by the post-money valuation, so a higher pre-money means investors receive less ownership for the same check size.
You and your investors negotiate a pre-money number, usually informed by comparable deals, your traction, and how much competitive interest you have. Once agreed, post-money is simply pre-money plus the new investment.
If an option pool expansion is required as a condition of the round, which is common, that dilution typically comes out of the pre-money side, effectively lowering the real valuation founders receive credit for.
Pre-seed rounds typically run $2 million to $6 million pre-money. Seed rounds typically run $5 million to $15 million. Series A rounds typically run $15 million to $40 million. These ranges vary widely by market, traction, and sector, and shift with overall market conditions.
European valuations tend to run 20 to 40 percent below US equivalents at the same stage, reflecting differences in market size and investor competition.
Pre-money is $8 million. An investor puts in $2 million. Post-money equals $8 million plus $2 million, or $10 million. The investor owns $2 million divided by $10 million, or 20 percent.
If the option pool is expanded pre-round, a common investor ask, that dilution comes out of the founders' side, effectively lowering the real pre-money valuation founders are getting credit for.
Optimizing for the highest headline valuation instead of the best investor and terms. A high valuation sets a bar you must clear again at the next round.
Not accounting for option pool expansion. A $10 million pre-money valuation paired with a 15 percent pool increase is effectively lower once the pool comes out of the founders' side.
Confusing pre-money and post-money when comparing term sheets from different investors, which leads to comparing offers that are not actually equivalent.
On your ask slide, state the raise amount and a target valuation range, or leave valuation open if you want competitive bids from multiple investors.
Turn your metrics into a pitch narrative investors can follow.
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