Valuation
Definition
Valuation: Valuation is the estimated worth of a company at a given point in time. Pre-money valuation is the company's value before receiving new investment, while post-money valuation includes the new investment. Valuation determines how much equity investors receive for their investment.
Example Usage
“We raised $5M at a $20M pre-money valuation, giving investors 20% of the company.”
Common Misconceptions
Related Terms
Term Sheet
A term sheet is a non-binding document outlining the key terms of a proposed investment, including valuation, investment amount, board composition, li...
Dilution
Dilution occurs when a company issues new shares, reducing existing shareholders' ownership percentage. In each funding round, founders and early inve...
Cap Table
A capitalization table (cap table) is a spreadsheet or database showing the equity ownership of a company, including shares held by founders, employee...
Series A
Series A is typically the first significant venture capital funding round after seed, usually ranging from $5M to $20M. At this stage, startups are ex...
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