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Post-Money Algebra
Back-calculate implied pre-money and post-money valuations from a VC term sheet offering.
Inputs
Implied Post-Money Valuation
Implied Pre-Money Valuation
The Math
The Math: VC term sheets often dictate the investment amount and the target ownership percentage they want. From this, you must back into the valuations.
Post-Money = Investment Amount / Target %
Pre-Money = Post-Money - Investment Amount
If a VC offers $2M for 20%, they are valuing your company at $10M Post-Money, which means the Pre-Money valuation is $8M.