Post-Money Valuation
Definition
The value of a company immediately after receiving new investment. Post-money valuation = pre-money valuation + new investment. This is the number typically cited in press releases and fundraising announcements. Post-money valuation divided by total shares outstanding gives the implied per-share price.
Real-World Example
A company raises $30M at a $120M post-money valuation. Pre-money was $90M. If there are 12M total shares, each share is nominally worth $10 ($120M / 12M shares). But remember: your common shares are worth less than this due to liquidation preferences on the preferred shares.
Common Mistake
Using post-money valuation to calculate what your shares are worth. The headline number includes investor protections (liquidation preferences, anti-dilution) that inflate the per-share value for preferred stock relative to your common stock. Your common shares may be worth 40-70% of the implied per-share price.
Why It Matters
Post-money valuation is the number you will hear most often but it is the least accurate for valuing your employee equity. Always apply a common stock discount and subtract liquidation preferences to estimate your actual equity value.
Related Terms
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