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Pre-Money Valuation

   Also found in: Wikipedia 0.01 sec.
Pre-Money Valuation
The value of a company just before its most recent round of financing. Related: Post-Money Valuation

Pre-Money Valuation
In venture capital, an estimate of the value of a privately held company before its IPO. Venture capitalists use the pre-money valuation to help determine how much money an IPO is likely to raise. However, the pre-money valuation is, at best, an educated guess, and there is no guarantee that the IPO will actually raise that much. It is also called simply pre-money.


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In the above case, a pre-money valuation of $1 million and a post-money valuation of $1.
About six intense months later, the firm sought financing with a respectable pre-money valuation of $10 million.
The ownership percentage is a function of the pre-money valuation of the company upon which the VCs and the company agree.
 
 
 
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