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Dictionary by pitch.dog
Valuation methods & enterprise value · Core

Pre-money valuation

Also called: pre-money value, pre-money

ELI5

Company equity value immediately before a financing.

Used in conversation

“The range matters more than a false point estimate for pre-money valuation.”

Pitch context

You will see “Pre-money valuation” in financial models, budgets, board packs and investor materials when the discussion reaches valuation methods & enterprise value.

Why it matters: In valuation methods & enterprise value, a loose definition can change rights, obligations, approval, disclosure or enforceability.

Caution

Meaning, enforceability and required process vary by jurisdiction and agreement; this definition is not legal advice.

Connected terms

  • Valuation capA valuation cap governs conversion economics in a convertible instrument; a pre-money valuation prices an equity financing before new money.
  • Post-money valuationPre-money value excludes the new financing; post-money value includes it under the stated transaction definition.
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Sources & evidence · 9

Direct term-level sources and supporting source families.