Pre-Money Valuation

What is Pre-Money Valuation?

Pre-money valuation refers to the value of a startup before it receives external funding or investment. It is a key factor in determining the ownership percentage that investors will receive in exchange for their investment. A higher pre-money valuation indicates that a company is worth more prior to the funding round, thus resulting in less dilution for existing shareholders.

Factors Influencing Pre-Money Valuation

• Traction: Revenue growth, user base, and market adoption.
• Market Opportunity: Size of the target market and growth potential.
• Competitive Landscape: Presence of competitors and barriers to entry.

Related Terms and Concepts

Post-money valuation, equity, dilution, term sheet