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Finance Calc Kit
Business

Pre and Post Money Valuation Calculator

Calculate startup pre-money valuation, post-money valuation, investor ownership percentage, and equity dilution.

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Post-money valuation

$5,000,000.00

Pre-money $4,000,000.00 + investment $1,000,000.00

Investor ownership

20.00%

Equity stake from this round

Founder retained equity

80.00%

Existing shareholders after dilution

Price per share

$4.0000

Based on pre-money valuation

New shares issued

250,000

Total post-round: 1,250,000 shares

How we calculated this

Open to see each step from your inputs to the result.

  1. Calculate post-money valuation

    Post-Money=Pre-Money+Investment\text{Post-Money} = \text{Pre-Money} + \text{Investment}

    Post-Money = $4,000,000 + $1,000,000 = $5,000,000

  2. Calculate investor ownership

    Investor %=InvestmentPost-Money×100\text{Investor \%} = \frac{\text{Investment}}{\text{Post-Money}} \times 100

    Investor % = ($1,000,000 / $5,000,000) × 100 = 20.00%

  3. Calculate price per share

    Share Price=Pre-MoneyExisting Shares\text{Share Price} = \frac{\text{Pre-Money}}{\text{Existing Shares}}

    Share Price = $4,000,000 / 1,000,000 = $4.0000

  4. Calculate new shares issued

    New Shares=InvestmentShare Price\text{New Shares} = \frac{\text{Investment}}{\text{Share Price}}

    New Shares = $1,000,000 / $4.0000 = 250,000

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What are pre-money and post-money valuations?

Pre-money valuation is the agreed value of a company immediately before new investment closes. Post-money valuation is the company value after the new capital is added. Venture investors, founders, and employees use these figures to determine ownership percentages, share price, and dilution from each funding round. All math runs in your browser.

When modeling how a new equity round affects shareholder returns, pair this tool with the cost of equity calculator to estimate required investor returns. For broader capital structure planning, the cost of capital calculator combines equity and debt costs into a single hurdle rate.

Pre-money and post-money formulas

When you know the pre-money valuation and investment amount, post-money valuation follows directly:

Post-Money=Pre-Money+Investment\text{Post-Money} = \text{Pre-Money} + \text{Investment}

Investor ownership percentage equals the investment divided by post-money valuation:

Investor %=InvestmentPost-Money×100\text{Investor \%} = \frac{\text{Investment}}{\text{Post-Money}} \times 100

When you know the target ownership percentage instead, solve for post-money first:

Post-Money=InvestmentTarget Ownership %/100\text{Post-Money} = \frac{\text{Investment}}{\text{Target Ownership \%} / 100}

Share price is based on pre-money valuation divided by existing shares. New shares issued equal investment divided by share price:

Share Price=Pre-MoneyExisting Shares,New Shares=InvestmentShare Price\text{Share Price} = \frac{\text{Pre-Money}}{\text{Existing Shares}}, \quad \text{New Shares} = \frac{\text{Investment}}{\text{Share Price}}

Worked example

A startup raises $1,000,000 at a $4,000,000 pre-money valuation with 1,000,000 shares outstanding.

  • Post-money valuation = $4,000,000 + $1,000,000 = $5,000,000
  • Investor ownership = ($1,000,000 / $5,000,000) × 100 = 20%
  • Share price = $4,000,000 / 1,000,000 = $4.00
  • New shares issued = $1,000,000 / $4.00 = 250,000
  • Total shares after round = 1,250,000

Existing shareholders retain 80% of the company. The investor receives 20% for their $1,000,000 contribution.

Why pre-money vs post-money matters

Term sheets often state valuation on either a pre-money or post-money basis. A $5,000,000 post-money round with a $1,000,000 investment implies a $4,000,000 pre-money valuation. If the same $1,000,000 were described as post-money only without clarifying pre-money, founders might misread dilution by a full investment amount.

Convertible notes, SAFEs, and option pools can further affect effective ownership. This calculator models a straightforward priced equity round. For more complex cap table scenarios, verify outcomes against your legal documents and fully diluted share count.

Frequently asked questions

What is the difference between pre-money and post-money valuation?
Pre-money valuation is the company value before new investment. Post-money valuation adds the investment to pre-money. If pre-money is $4,000,000 and investment is $1,000,000, post-money is $5,000,000.
How do I calculate investor ownership from an investment?
Divide the investment by post-money valuation and multiply by 100. A $1,000,000 investment into a $5,000,000 post-money company gives the investor 20% ownership.
How is share price determined in a funding round?
Share price equals pre-money valuation divided by existing outstanding shares before the round. New shares issued equal investment divided by that share price.
Can I calculate pre-money from a target ownership percentage?
Yes. Post-money equals investment divided by target ownership percentage. Pre-money equals post-money minus investment. Enter target ownership mode in the calculator to solve automatically.
Does this include option pool dilution?
No. This tool models a simple priced round with known existing shares. Option pools, convertible instruments, and anti-dilution provisions require separate cap table modeling.
Are my inputs stored on a server?
No. All calculations run in your browser. URL parameters let you bookmark and share specific scenarios without sending data to a server.

Resources and references

The formulas and methods in this calculator were checked against these independent sources.