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Post-Money Valuation
The value of a company immediately after receiving new investment, calculated as pre-money valuation plus investment amount.
Formula
Post-Money Valuation = Pre-Money Valuation + Investment Amount
Founder Ownership After = Pre-Money ÷ Post-Money × Previous Ownership %
Definition
What is Post-Money Valuation?
Post-money valuation is what your company is worth immediately after receiving new investment. It equals pre-money valuation plus the investment amount.
Post-money is often used in SAFE agreements, where the valuation cap is expressed as post-money rather than pre-money. This is cleaner for calculating ownership percentages.
Why Post-Money Valuation Matters
Post-money sets the baseline for your next round. A flat round means the same post-money. An up round means higher post-money. A down round means lower post-money, which triggers anti-dilution provisions.
It also determines paper wealth. If you own 30% of a company with $20M post-money valuation, your stake is worth $6M on paper (though actual value depends on liquidation preferences and market conditions).
Post-Money SAFEs
Y Combinator popularized post-money SAFEs, where the valuation cap is post-money. This makes dilution calculations simpler and more transparent for founders.
Example
Series A terms:
- Pre-money: $15,000,000
- Investment: $5,000,000
Post-money = $15M + $5M = $20,000,000
New investor owns: $5M ÷ $20M = 25%
Your company is now valued at $20M on paper. Your next round will be priced relative to this post-money.
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