Pre-Money Valuation: Understanding Startup Worth Before Funding
Pre money valuation is simply the estimated worth of a startup before it raises external funding. It’s based on factors like the company’s current performance, growth potential, and market trends. So, how is this different from post-money valuation? Post-money valuation is the company’s value after the funding round. The key difference between the two is straightforward—post-money valuation includes the new investment, while pre-money valuation doesn’t. Essentially, the gap between them is just the amount of funding received.