What Is Post-Money Valuation?
Post-money valuation is a company's value immediately after a round, equal to the pre-money valuation plus the new money invested.
How it works
The formula in words: post-money valuation equals pre-money valuation plus the amount invested. An investor's percentage ownership from a round is their investment divided by the post-money valuation, which makes this number the easiest way to see what a check buys.
Post-money also appears in some SAFEs. A "post-money SAFE" sets a valuation cap that already includes all SAFE money, so each SAFE holder can calculate their ownership in the company before the next priced round more directly.
Example
For example, an investor puts $500,000 into a company at a $5,000,000 post-money valuation. Their ownership is $500,000 divided by $5,000,000, or 10 percent. The pre-money valuation in that deal is $4,500,000. Founders and earlier holders share the remaining 90 percent, before any option pool changes.
Why founders care
Post-money is the clearest way to compare offers and to see dilution. If three investors each put in money at a $5,000,000 post-money, together they own the percentage their combined money divided by $5,000,000 implies, and the founders keep the rest. Knowing the number lets you project what you keep after each round.
Common mistakes
- Comparing one investor's pre-money offer to another's post-money offer.
- Forgetting that stacking several SAFEs adds up quickly.
- Not checking whether the quoted number includes a larger option pool.
Frequently asked questions
Is post-money valuation higher than pre-money?
Yes, by the amount invested. The same deal at a $4 million pre-money with $1 million invested is a $5 million post-money. The company is not worth more on the day, the new cash is simply counted.
How do I calculate ownership from post-money valuation?
Divide the investment by the post-money valuation. For example, $250,000 at a $2,500,000 post-money buys 10 percent. Confirm the actual share counts in the legal documents.
Related terms
Go deeper
- How to Value a Startup: Methods for Pre-Revenue Companies GuideHow to value a startup before it has revenue: common methods, pre-money vs post-money, and a worked dilution example with round numbers you can follow.
- SAFE vs Convertible Note: Which Is Better for Founders? GuideSAFE vs convertible note explained: how each works, valuation caps, discounts, interest and maturity, with a worked example and the trade-offs for founders.
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General information, not legal, tax or financial advice. Reviewed 11 November 2026.