Pre-Money Valuation

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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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Median pre-money valuations increased slightly in seed deals while decreasing in Series A and D+ transactions.
Despite the active IPO market (a total of 79 when biopharmaceutical companies are factored into the equation), both pre-money valuations and dollars raised at public offerings declined in 2014, the SVB report said.
The median pre-money valuations in biopharma fell nearly 40 percent from 2012, to $129 million, and dollars raised remained flat.
using IPOs to exit are typically more advanced than those exiting through M&A, and they usually experience higher pre-money valuations.
Finally, the authors show that equal splitting is associated with lower pre-money valuations in first financing rounds.
From the information we have concerning investment transactions within the last six months in the social networking space, we have found a range of 5 to 7 for EBITDA multiples used to determine pre-money valuations.
Although there was plenty of price competition with out-of-region investors for attractive in-region start-ups, the pre-money valuations of most companies were fairly reasonable.
Contrary to ongoing concerns throughout the industry, Levensohn said his analysis of VentureSource data on median pre-money valuations suggests no consistent inflationary trend in the pricing of early financing (first and second) round valuations.
Across industries, the data points to a decrease in median pre-money valuations across all deal stages with the exception of Series D+ transactions.
Within the health-care segment, later-stage medical device companies had the highest median pre-money valuations for the quarter, at $39 million, compared to $26 million overall for biopharmaceutical companies.
When aggregated across industries, our data pointed to a decrease in median pre-money valuations across all deal stages, with the exception of Series D+ transactions.
com, have appreciated significantly as they have achieved pre-money valuations in recent financings of $120-million and $50-million, respectively.

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