# Post-Money Valuation

## Quick Definition

A company's valuation immediately after receiving new investment, equal to pre-money valuation plus new capital raised.

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## What is Post-Money Valuation?

Post-money valuation is what your company is worth immediately after a new investment closes. It's the pre-money valuation plus the new money coming in. This number directly determines how much of the company the new investor owns.

## Why Post-Money Valuation Matters

Post-money sets the ownership math. If an investor puts in $2M at a $10M post-money valuation, they own exactly 20%. No ambiguity. This is why post-money SAFEs became popular: the dilution is known upfront.

It also sets the benchmark for your next round. Your Series A post-money becomes the floor expectation for Series B pre-money. A down round means raising below that number.

## Pre-Money vs. Post-Money

The difference is simple but critical:

- **Pre-money** = what your company is worth before new money enters
- **Post-money** = pre-money + new investment

When a VC says "we'll invest $5M at $20M," clarify whether that's $20M pre or post. At $20M pre, they own 20% ($5M / $25M post). At $20M post, they own 25% ($5M / $20M post). That 5% gap is massive.

### Formula

Post-Money Valuation = Pre-Money Valuation + New Investment  
Investor Ownership = New Investment ÷ Post-Money Valuation

### Example

Your SaaS startup raises a Series Seed:

- Pre-money valuation: $8M  
- New investment: $2M  
- Post-money valuation: $8M + $2M = $10M

Investor ownership: $2M ÷ $10M = 20%

If you had negotiated a $10M pre-money instead:

- Post-money: $10M + $2M = $12M  
- Investor ownership: $2M ÷ $12M = 16.7%

That $2M difference in pre-money saved you 3.3% dilution.

## Related Terms

[**Valuation Cap**  
The maximum valuation at which a SAFE or convertible note converts to equity, protecting early investors from excessive dilution.  
Learn more](/content/terms/valuation-cap/index.html)

[**SAFE (Simple Agreement for Future Equity)**  
An investment agreement that converts to equity in a future funding round, featuring a valuation cap and/or discount without debt terms.  
Learn more](/content/terms/safe-simple-agreement-future-equity/index.html)

[**Convertible Note**  
A debt instrument that converts to equity in a future funding round, featuring interest accrual and a maturity date.  
Learn more](/content/terms/convertible-note/index.html)

## Learn More About Post-Money Valuation

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Compare Mercury, Brex, SVB, Chase, and Relay side by side. See which bank fits pre-seed through Series A, plus venture debt and treasury strategies.  
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