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Pre-Money Value

Pre-Money Value

  • Term

    Main definition

  • Pre-Money Value

    The (agreed-upon, conceptual) value of a company immediately prior to the current funding round. This value is determined by negotiation, with the VC fund extrapolating same via its financial model, constructed after some measure of financial and projections due diligence, and the application of various valuation methodologies. Pre-money value is calculated (as a mathematical matter, ex post facto) by multiplying the number of outstanding (or fully diluted) shares before the current round, times the agreed (or derived) purchase price per share in the round. See also Post-Money Value.

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