The Pre Money Valuation Estimator derives the company’s value immediately before a financing from the stated post-money valuation and new investment amount. It also shows the ownership percentage implied for the new investor in a straightforward priced round. This calculation is useful when a term sheet emphasizes post-money value or when founders want to reconcile valuation language with dilution. It does not by itself account for pre-closing option-pool changes, converted securities, debt, or other cap-table adjustments.
1. Enter post-money valuation
Use the company value immediately after including the new investment.
2. Enter new investment
Use the amount of new cash included in that post-money figure.
3. Review the implied pre-money value
The calculator subtracts the investment from post-money valuation.
4. Check investor ownership
The new-money percentage equals investment divided by post-money valuation.
Where:
Assumptions: The stated post-money value includes only the entered new investment and uses a simple priced-round convention.
Pre-money valuation isolates the negotiated value attributed to the company before the financing proceeds are added.
Term sheets may use fully diluted capitalization and option-pool assumptions that change the practical dilution allocation.
Given: Post-money valuation = $10 million and new investment = $2 million.
Calculation: Pre-money valuation = $10M − $2M = $8M. Investor ownership = $2M ÷ $10M = 20%.
Result: The implied pre-money valuation is $8 million, and the new investor owns 20% after the round.
Not in this simplified financing model. If investment exceeds the stated post-money value, the inputs are inconsistent.
It is a negotiated company equity valuation in many startup rounds, but debt, cash, and security terms can complicate comparisons.
When created pre-money, the increase typically dilutes existing holders before the new investor enters.
Not by itself. SAFE conversion requires the instrument’s cap, discount, and capitalization mechanics.
It provides a quick consistency check between the investment amount and the post-money valuation stated in a financing proposal.