Startup Terms Glossary
What is Effective Pre Money?
Effective pre money refers to a valuation method that can be used to determine the worth of a company. This valuation does not include two things: the most recent round of funding or any external funding. A good way to look at this metric is to think of it as a way to determine how much a startup could be valued at before any outside investments are received.
Effective Pre Money Examples
Here are some important points about effective pre money valuation:
- Point 1. This valuation can be used early in startup development
- Point 2. Pre-share value can be determined
- Point 3. The higher the pre-share value, the higher the cost of each share
This article is also about effective pre money.
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