Pre-money vs Post-Money Valution

Valuation Confusion: Pre-Money vs Post-Money — What Every Founder Must Know!

You can’t negotiate your dream if you can’t calculate your worth. Valuation is not about the money you raise — it’s about how much of you keep.

Pre-money. Post-money. Same word, different meanings.

Pre-money = your company’s value before the investor steps in.

Post-money = pre-money + the investment.

Let’s break it down simply.

You’re raising ₹10 lakh from an investor. If they say your pre-money valuation is ₹90

Lakhs — that means your startup is worth ₹90 lakhs before the investment.

After the investor adds ₹10 lakhs , your post-money valuation becomes ₹1 crore.

Simple? Yes. But most founders confuse the two - and that confusion can dilute your ownership faster than your next coffee break.

Knowing your Pre-money helps you protect your equity.

Knowing your post-money helps you see your true worth after investment.

When you mix them up, you give away more than you planned - sometimes unknowingly.

Understanding valuation isn’t optional. It’s survival. Investors want founders who know what every rupee and every percent means. And most founders think fundraising is about convincing investors.

It’s not.

It’s about understanding yourself first.

You need to know:

• What’s your business really worth right now?
• How much are you ready to dilute?•What does that dilution mean for your future rounds?

If you can’t explain that, investors won’t trust that you can handle their money responsibly. Every term sheet is a trust sheet.

When you don’t understand valuation, you’re not signing a deal — you’re signing away control.

Your valuation decides:

• How much control you retain.
• How much you can raise next round.
• How much your dream is really worth- today and tomorrow.

You'll miss the math and you'll miss your mark.

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