RESULTS
Fill the calculator form and click on Calculate button to get result here
You can calculate pre money valuation and post money valuation with our money valuation calculator. It is a simple to use tool, all you have to do is input two variables that are required for the process of calculation. Namely, the investment amount and investor’s equity share.
With these two variables entered, our little gizmo would measure the pre and post money valuation of your company based on the pre and postmoney valuation formula.
Overview
Pre and post money differ in the duration of valuation. Both premoney and postmoney are valuation metrics of companies and are important in measuring the worth of the given company.
What is Premoney valuation
Premoney valuation refers to the value of a company excluding the external or the latest wave of funding. It is best explained as how much a startup could be valued before it begins to obtain any venture capital into the company.
This value measurement does not just give venture capitalists an idea of the current worth of the business, it also provides the value of each issued share.
What is Postmoney valuation
On the other end, postmoney valuation implies how much the company is worth after it collects the venture capital and investments into it. This valuation includes outside financing or the most recent capital poured in.
Why the difference matters
The difference between the premoney and the postmoney valuation of a company matters because at the end of the day, it defines the equity share that venture capitalists are entitled to after the funding round is over.
For instance, if a venture capitalist invests $400,000 in a company, he/she would be entitled to an equity share of 20 percent if the premoney valuation of the company were set at $2 million.
This share jumps to 25 percent if its premoney valuation were set at $1.6 million. This can have radically sensitive legal and financial repercussions on the company long after the funding round is over.
Calculation
Post money valuation calculation
Postmoney valuation is extremely easy to determine. Use the following formula:
PostMoney Valuation = \( \dfrac{Investment Dollar Amount}{Percent Investor Receives}\)
Let’s assume an investor invests $33 and the respective percentage for that investment in the company is 1%.
We can apply the above formula:
Postmoney valuation = \( \dfrac{33}{1} = \$33\)
Pre and money valuation calculation
Determiningpre money valuation is a nobrainer. Remember that this value of a company comes before it receives any financial capital. Naturally, this figure gives investors an insight of what the company would be valued in the current time.
One important requirement for the calculation of premoney is that you should know the postmoney valuation of the company.
Here goes the formula:
PreMoney Valuation = \(\mathbf{Post Money Valuation  Investment Amount} \)
 Consider this, the postmoney valuation of a given company stands at \(\$33 \mathbf{\small{million}}\). Suppose that the company absorbed total funding in the form of venture capital to be \(\$10\).
 Employing the formula given above, we calculate it.
 Premoney valuation = \(\$33  \$10\) (Subtracting the postmoney valuation from the amount of investment, we get:
 \(\$33 \mathbf{\small{million}}  \$10 \mathbf{\small{million}} = \$23 \mathbf{\small{million}}\)
So, we know that the premoney value of the company stood at \(\$23 \mathbf{\small{million}}\).
How to use our calculator
As has been discussed above, you can use our calculator and skip all the math if you find it boring.
Here’s how to do it:
 Input the amount of investment
 Input the investor’s equity (percentage)
 Press ‘calculate’
And that’s it. It would reveal both the premoney and postmoney valuation of the company in question.

Total Reviews 1

Overall Rating
5/5
 Stars
Thank You! For Your Review
Your Review Will Appear Soon.
This tool always shows accurate results about pre and post Money valuation.