What is post-money valuation?

Full Explanation

Post-money valuation is the figure many founders focus on because it feels more concrete: if investors value your company at £6M post-money and invest £1M, the company has raised £1M. However, post-money is derived, not independently negotiated — it is simply pre-money plus cheque size. The more meaningful metric from a founder's perspective is pre-money, because it determines your dilution percentage. Post-money is useful for comparisons across time: you can track the company's implied valuation growth from one round to the next. If a Series A closes at £5M post-money and a Series B closes at £15M post-money, the company's implied value has grown 3x. However, this does not directly translate to founder wealth because interim dilution matters: if the founder held 80% after Series A but only 50% after Series B, their dollar value may not have grown 3x. Always negotiate on pre-money terms and calculate resulting equity percentages on a fully diluted basis.

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