Post-Money Valuation
Also known as Post-Money, Post-Money Value, Post-money
Post-money valuation is the company's value immediately after a new financing closes. It equals pre-money valuation plus the new investment, and it is the denominator for the new investor's ownership percentage.
Formula
Post-Money Valuation = Pre-Money Valuation + New Investment- Post-Money Valuation
- Company value the instant after the round closes; sets the denominator for new investor ownership
- Pre-Money Valuation
- Agreed company value before the round, set in negotiation
- New Investment
- Total cash raised in the round, across all participants
In depth
Post-money valuation is the simple part of the math. Whatever the pre-money figure is, add the new round's check, and that is post-money. The reason it gets press attention is that it is the only number that can be computed cleanly from the deal announcement without seeing the cap table: investor put in $X, company is now worth $Y, ownership is X over Y. Everything else (founder dilution, option pool effect, anti-dilution mechanics) requires the full cap table.
Post-money is also the number that anchors most SAFE and convertible-note caps issued since 2018. A post-money SAFE fixes the holder's ownership percentage at signing as a fraction of post-money, which removes the cross-dilution that pre-money SAFEs created among themselves. The cost is that founders, rather than other note holders, absorb dilution from each new SAFE.
Why it matters
Post-money is the headline. It is what gets reported, what drives press cycles, and what LPs use to compute unrealized markups on a portfolio company. But post-money on its own says nothing about how much the founders kept or how much the new investor's preferred is actually worth relative to common stock. Sophisticated readers pair every post-money figure with the pre-money, the option pool change, and the liquidation preference stack.
Worked example
A founder owns 100% of a startup. The Series Seed term sheet is $2M raised at $8M pre-money. The cleanest path to post-money:
Post-money = $8M pre + $2M new = $10M
Investor ownership = $2M / $10M = 20.0%
Founder ownership = 1 - 20.0% = 80.0%
| Holder | % owned |
|---|---|
| Founder | 80.0% |
| New investor | 20.0% |
| Total | 100.0% |
If the same round were quoted as $2M at $10M post-money (instead of $8M pre-money), the math is identical. That is why post-money quoting is now standard in YC SAFEs and many priced rounds: the ownership percentage falls out of the headline number without needing to specify the option pool treatment separately.
Frequently asked
How do I compute new investor ownership from post-money?
Divide the check by post-money. A $2M investment at $10M post-money is 20% ownership for that investor (or that syndicate, in aggregate). This is the cleanest reason SAFEs increasingly use post-money valuation caps: the math is unambiguous.
Why did YC switch from pre-money to post-money SAFEs?
YC moved the standard SAFE to a post-money valuation cap in 2018 because pre-money SAFEs caused unpredictable dilution. With a pre-money cap, every additional SAFE issued before priced conversion diluted the earlier SAFE holders. With a post-money cap, each SAFE holder's percentage is fixed at signing, and the founder absorbs all the dilution from later SAFEs. Cleaner accounting, predictable cap table, harder on founders if they stack SAFEs.
Is the post-money valuation what the company is 'worth'?
No. Post-money is a transaction-derived value for preferred stock on a specific date. It assumes every share has the same value as the preferred just priced, which is rarely true given liquidation preferences, anti-dilution, and option-pool overhang. Carta and Pitchbook publish post-money figures because they are observable, not because they are fair-value common-stock prices.
What's the relationship between post-money valuation and unicorn status?
A unicorn is a private company with a post-money valuation of $1B or more, the term coined by Aileen Lee in 2013. The post-money number is what the press reports, but it includes preferred-stock rights worth less to common holders than the headline suggests. A 2018 NBER paper by Gornall and Strebulaev found unicorn common-stock value is typically 13-58% lower than the headline post-money implies.