Post-Money Valuation
The value of a company immediately after receiving external investment or financing.
Definition
Post-money valuation represents the total value of a company after new investment capital has been added. It includes the pre-money valuation plus the amount of new investment, and determines the ownership percentage that investors receive for their investment.
How to Calculate
Basic Formula:
Post-Money Valuation = Pre-Money Valuation + Investment Amount
Investor Ownership:
Investment Amount ÷ Post-Money Valuation = Ownership %
Real-World Example
Investment Example: $15M pre-money + $5M investment = $20M post-money valuation
The investor receives $5M ÷ $20M = 25% ownership for their $5M investment.