Pre-Money Post-Money Valuation Calculator
This calculator helps founders, investors, and advisors convert between pre-money and post-money valuations, compute implied investor ownership, and model a common negotiation where an option pool is created or expanded before the round.
Multiple input workflows are provided so you can start from the numbers you know (investment + target percent, pre-money + investment, or post-money + investment). Results are shown on a consistent, fully diluted basis where applicable.
Given how much the investor will invest and the ownership percentage they should hold after the round, compute post-money, pre-money, and implied ownership.
Inputs
Advanced inputs
Option pool inputs
Results
Post-money valuation (USD)
$5,000,000.00
Pre-money valuation (USD)
$4,000,000.00
Implied ownership (%)
2000.00%
| Output | Value | Unit |
|---|---|---|
| Post-money valuation (USD) | $5,000,000.00 | USD |
| Pre-money valuation (USD) | $4,000,000.00 | USD |
| Implied ownership (%) | 2000.00% | % |
Visualization
Methodology
Core definitions: post-money valuation equals the value of the company immediately after the new capital is added. Pre-money equals post-money minus the new investment. Implied ownership equals the new investment divided by the post-money valuation.
Option-pool adjustment: many negotiations expand the option pool pre-money. A common way to report valuations is to adjust the pre-money valuation so that the target option pool exists on a fully diluted, pre-investment basis; this calculator follows that conventional adjustment for modeling purposes.
Practical limits and safety: calculations assume simple equity investments (no convertible instruments, liquidation preferences, or ratchets). For transactions with convertible notes, SAFE instruments, complex preference stacks, or jurisdictional tax treatment, consult legal and accounting advisors.
Worked examples
Example 1: Investor puts in 1,000,000 for 20 percent post-money. Post-money equals 1,000,000 divided by 0.20, or 5,000,000; pre-money equals 4,000,000.
Example 2: Company targets a 4,000,000 pre-money but must create a 10 percent option pool pre-round. Adjusted pre-money equals 4,000,000 divided by 0.90, or 4,444,444. After a 1,000,000 investment, post-money equals 5,444,444; investor ownership equals 1,000,000 divided by 5,444,444, or about 18.36 percent.
Key takeaways
Choose the method that matches the terms you have (target ownership, known pre-money, or known post-money).
Use the option-pool adjustment when the term requires creating/expanding a pool before the investor's money, and remember this will dilute existing shareholders.
This tool provides indicative calculations for planning and negotiation; it is not a substitute for legal, tax, or accounting advice.
Further resources
External guidance
Expert Q&A
What is the difference between pre-money and post-money valuation?
Post-money valuation is the company's value immediately after the investment. Pre-money valuation is the company's value immediately before the investment: pre-money = post-money - investment.
How does creating an option pool pre-money change valuations?
Expanding or creating an option pool pre-money increases the fully diluted share count before the investment, which is commonly modelled by inflating the pre-money valuation so that the target pool exists on a pre-investment, fully diluted basis. This reduces founder ownership and the investor's percentage may be lower than a naive calculation that ignores the pool.
Are these calculations guaranteed accurate for every deal?
No. These calculations assume simple equity with no contingent rights, preferences, or convertibles. For rounds featuring liquidation preferences, participating preferred, convertible securities, SAFEs, or complex cap-table waterfalls, results are only indicative. Consult qualified legal and accounting professionals for binding calculations.
What units and rounding are used?
Monetary outputs are shown as currency amounts. The calculator uses exact arithmetic for displayed formulas; final displayed values may be rounded for readability. Verify significant figures with your advisors when preparing term sheets or legal documents.
How is data privacy and accuracy handled?
This tool is a modelling aid. Secure handling of sensitive material should follow organizational and industry standards. See cited standards for guidance on data integrity, software quality, and operational safety.
Sources & citations
- NIST Cybersecurity Framework — https://www.nist.gov/cyberframework
- ISO standards catalogue (general) — https://www.iso.org/standards.html
- IEEE Standards Association — https://standards.ieee.org/
- OSHA (workplace safety and operational guidance) — https://www.osha.gov/