Onyx Partners Group has always been a supporter of innovation, creativity, and entrepreneurship. Whether it is liquidity, capital raise, financing, seed money, all have different meanings but can have a significant impact on the value of your business, depending on when it is used. Terms like pre-money and post-money valuation get tossed around by groups such as venture capitalist, angel investors and private equity firms. How do you know which to use? Pre-Money and Post-money valuations both have different meanings and purposes when valuing a business for raising capital. Each valuation will deliver a different value of your company before an investment is even made. The raise will also have an impact on the percentage of ownership.
Both pre-money valuation and post-money valuation are measures of the value of a company but differ in timing.
Pre-money valuation is the valuation that is conducted on your business prior to the capital raise.
Post-money valuation is the capital that has been raised plus the current value of the business.