Pre-Money vs Post-Money Valuation Calculator
Enter the valuation you know and the size of the round to get the other valuation and the new investor's ownership. Add your share count for the price per share, and an option pool to see who it dilutes.
Pre-money valuation is what a company is worth immediately before a new investment; post-money valuation is what it is worth immediately after. Post-money equals pre-money plus the new money, and the investor's ownership is the investment divided by post-money. A $5M investment at $20M pre-money is $25M post-money and buys 20%.
Pre-Money vs Post-Money Valuation: The Formulas
Y Combinator's SAFE user guide describes the two as "two different ways of framing the same valuation of the company, but at different points in time", and gives the example that raising $2 million at a $10 million pre-money valuation is generally the same as raising $2 million at a $12 million post-money valuation (YC Post-Money Safe User Guide). The table uses the numbers from the Load Example button, without an option pool.
| You want | Formula | $20M pre-money, $5M raised, 8,000,000 shares |
|---|---|---|
| Post-money valuation | Pre-money + new investment | $20M + $5M = $25M |
| Pre-money valuation | Post-money − new investment | $25M − $5M = $20M |
| New investor ownership | Investment ÷ post-money | $5M ÷ $25M = 20% |
| Existing holders after the round | 100% − investor ownership | 80% |
| Price per share | Pre-money ÷ fully diluted shares before the round | $20,000,000 ÷ 8,000,000 = $2.50 |
| New shares issued | Investment ÷ price per share | $5,000,000 ÷ $2.50 = 2,000,000 |
Why the Difference Matters in a Negotiation
"A $20 million valuation" is ambiguous until someone says pre or post. With $5M going in, the two readings differ by five points of ownership, so state which one you mean and write it down.
| "$20M" means | Pre-money | Post-money | New investor | Existing holders |
|---|---|---|---|---|
| Pre-money | $20M | $25M | 20.00% | 80.00% |
| Post-money | $15M | $20M | 25.00% | 75.00% |
Option Pool: In the Pre-Money or After the Round
A term sheet can require a new employee option pool to be counted inside the pre-money valuation. The headline numbers do not change, but only the existing holders are diluted by the pool, which lowers their effective pre-money valuation: pre-money minus the pool's share of post-money. The example is $20M pre-money, $5M raised, 8,000,000 existing shares and a pool equal to 10% of the shares after the round.
| Pool created before the round | Pool created after the round | |
|---|---|---|
| New investor | 20.00% | 18.00% |
| New option pool | 10.00% | 10.00% |
| Existing holders | 70.00% | 72.00% |
| Price per share | $2.1875 | $2.5000 |
| Effective pre-money for existing holders | $17.50M ($20M − 10% of $25M) | $20.00M |
This effect is often called the option pool shuffle, after a 2007 Venture Hacks article whose own example turns an $8M pre-money valuation with a 20% pool into a $6M effective valuation (Venture Hacks, "The Option Pool Shuffle"). Enter 8, 2 and 20 in the calculator to reproduce it.
Post-Money SAFEs and the Next Priced Round
A SAFE is not a priced round, but the same vocabulary applies. The post-money SAFE has been the Y Combinator standard since 2018, and on it the ownership sold is the investment divided by the post-money valuation cap: in YC's example, $500,000 at a $5.5 million cap is about 9% and $500,000 at an $8.3 million cap is about 6% (YC SAFE documents). That cap counts all the SAFE money but not the money or the new option pool of the later priced round, so SAFE holders are diluted by that round like everyone else. This calculator models one priced round; it does not convert SAFEs or convertible notes.
Last updated: October 2026