Startup Terms Glossary
What is Pre Money Valuation?
A pre money valuation refers to the value of a company before any investments are made into it. The pre money valuation of a company is significant because it helps investors to see which companies are profitable enough for them to take an interest in. The higher the pre money valuation of a company is, the less risky the investment.
Pre Money Valuation Examples
Here is an example of pre money valuation:
- Point 1. A startup company and an investor have agreed that the value of their company is $500,000. The investor agrees to invest $25,000 into the company in exchange for a portion of ownership. The pre money valuation of the company is the value before any investments are made– in this case, $500,000.
This web page is also about pre money valuation.
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