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  • Raising Capital - Pre & Post Money Valuation

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    sparsh shah
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    The document outlines steps to calculate pre-money and post-money valuation for a company. It determines that with 1.2 million shares originally, the pre-money valuation is $12 million based on an $8.5 million investment at $10 per share. This values the company at $20.5 million post-money, with the VC owning 41.46% and the founder's stake reduced to 19.51%.

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    The document outlines steps to calculate pre-money and post-money valuation for a company. It determines that with 1.2 million shares originally, the pre-money valuation is $12 million based on an $8.5 million investment at $10 per share. This values the company at $20.5 million post-money, with the VC owning 41.46% and the founder's stake reduced to 19.51%.

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    4 views1 page

    Raising Capital - Pre & Post Money Valuation

    Uploaded by

    sparsh shah
    The document outlines steps to calculate pre-money and post-money valuation for a company. It determines that with 1.2 million shares originally, the pre-money valuation is $12 million based on an $8.5 million investment at $10 per share. This values the company at $20.5 million post-money, with the VC owning 41.46% and the founder's stake reduced to 19.51%.

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    © All Rights Reserved
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    Step 1: Determine Pre-Money Valuation:

    No. of Shares prior to new round of funding


    Stockholders No. of shares
    Ashwini 400,000.00
    Angel Investor 800,000.00
    Total Shares 1,200,000.00

    Calculate the Per share amount for VC


    Amount contributed by VC $ 8,500,000.00
    Therefore VC per share will be: $ 10.00

    Step 2: Calculate Pre-Money Valuation


    Multiply VC per share basis by total shares $ 12,000,000.00

    Step 3: Determine Post-Money Valuation:


    Whole Firm = Old + New shares @ funding price
    Stockholdrers: No. of shares
    Ashwini 400,000.00
    Angel Investor 800,000.00
    VC Firm 850,000.00
    Total Shares 2,050,000.00

    Calculate the Per share amount for VC


    Amount contributed by VC $ 8,500,000.00
    Therefore VC per share will be: $ 10.00

    Post-Money Valuation: $ 20,500,000.00

    Step 4: Calculate Ashwini's Ownership 19.51%

    Step 5: Calculate VC Ownership Stake 41.46%

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