Definition
Post-money valuation is the value of a company immediately after a new equity financing. It is commonly approximated as pre-money plus the new investment amount (simplified).
Formula
Post-money (simplified) = pre-money + investment
How to use it
- Investor ownership is often approximated as investment / post-money (simplified).
- Use a cap table to validate when option pool changes and convertibles are present.
Common mistakes
- Assuming post-money always equals pre-money + investment without checking term details.
- Using post-money ownership numbers that aren't on a fully diluted basis.
Measured as
Post-money (simplified) = pre-money + investment
Misused when
- Assuming post-money always equals pre-money + investment without checking term details.
- Using post-money ownership numbers that aren't on a fully diluted basis.
Operator takeaway
- Investor ownership is often approximated as investment / post-money (simplified).
- Use a cap table to validate when option pool changes and convertibles are present.
- Tie Post-money Valuation to the same balance-sheet date, scenario, and decision memo you are using elsewhere in the model.
- Document which claims, costs, or adjustments your team includes before comparing numbers across forecasts, covenants, or valuation work.
Next decision
- Quantify the impact with Pre-money vs Post-money Valuation Calculator if you need to turn the definition into an operating assumption.
- Read Pre-money vs post-money valuation: formulas, ownership, and pitfalls if the decision depends on interpretation, policy, or trade-offs beyond the raw formula.
Where to use this on MetricKit
Calculators
- Pre-money vs Post-money Valuation Calculator: Convert between pre-money and post-money valuation and estimate investor ownership from a financing round size.
- Pro Rata Investment Calculator: Estimate how much you need to invest in a new round to maintain your ownership percentage (simplified).
- Option Pool Shuffle Calculator: Estimate founder dilution impact when the option pool is increased to a target percent of post-money (simplified).
Guides
- Pre-money vs post-money valuation: formulas, ownership, and pitfalls: Learn pre-money vs post-money valuation, how investor ownership is estimated, and why the option pool shuffle changes effective dilution.
- Pro rata rights: what they mean and how to estimate your check size: A practical guide to pro rata rights: maintaining ownership, estimating dilution if you don't participate, and common allocation pitfalls.
- Option pool shuffle: how it impacts founder dilution (with example): Understand the option pool shuffle, why it's negotiated, and how a post-money option pool target changes dilution for existing holders.
- SAFE conversion explained: cap vs discount, dilution, and priced-round math: Use this guide when you need to model what a SAFE actually turns into in a financing. It covers cap vs discount, pre- vs post-money mechanics, and the dilution mistakes that surprise founders and operators.
- Fundraising & valuation hub: pre/post-money, SAFEs, notes, and liquidation prefs: A practical hub for startup fundraising and valuation basics: pre/post-money, pro rata, option pool shuffle, SAFE/note conversion, and liquidation preference outcomes.