Pre-money Valuation Calculator

Post-money = Pre-money + Investment. Investor % = Investment ÷ Post-money. Pre-money = Investment × (1 − Investor %) ÷ Investor %. Price per share = Pre-money ÷ fully-diluted pre-round shares. Effective pre-money = existing holders’ value after the option pool / SAFE.

Pre-money, post-money and the three levers

A funding round has three numbers locked together by one identity: post-money = pre-money + investment, and the investor’s ownership is just investment ÷ post-money. Because they’re linked, fixing any two pins the third — which is why this calculator is multi-directional. If you’re raising 2M and want to give up 20%, the pre-money has to be 8M (2M ÷ 0.20 = 10M post, minus 2M). If instead you’ve agreed an 8M pre-money and are raising 2M, the investor gets 2M ÷ 10M = 20%. And if you know the pre-money and the target ownership, the investment falls out. Getting clear on which number is being negotiated — pre or post — matters enormously, because a “10M valuation” means very different ownership depending on which one it is.

Worked example — raising 2M for 20%: Post-money = 2M ÷ 0.20 = 10M. Pre-money = 10M − 2M = 8M. Investor % = 2M ÷ 10M = 20%; founders keep 80% (before any option pool).

The option-pool shuffle

Here is where founders most often lose more than they realise. Investors typically require an employee option pool to be created as part of the round — say 10% of the post-money company. The decisive question is whether that pool is carved out of the pre-money or the post-money. In the pre-money version (the common default investors push for), the pool is added to the pre-round share count, so it comes entirely out of the founders’ side — the investor’s percentage is calculated after the pool already exists, and is therefore protected. The effect is that the “8M pre-money” the founder celebrated is really worth less to them, because part of it is an unallocated pool they don’t own. The calculator shows this as the effective pre-money, which sits below the headline.

In the post-money version, the pool is created after the investment and dilutes everyone proportionally — the new investor shares the pain. Founders keep more. The difference is not small: on an 8M pre-money with a 2M round and a 10% pool, the pre-money pool leaves founders an effective pre-money of about 7M, while the post-money pool leaves it nearer the full 8M and trims the investor’s stake instead. Always know which one a term sheet means.

Price per share, SAFEs and dilution

Price per share is the pre-money divided by the fully-diluted pre-round share count — the figure that actually goes on the stock-purchase agreement, and the basis for option strike prices. SAFEs and convertible notes add another layer: they don’t set a price when signed but convert at this round on the better of a valuation cap or a discount for the holder, and because they convert into the pre-money they further dilute founders and lower the effective pre-money — sometimes substantially if an early SAFE had a low cap. The cap table and ownership donut here show the full post-round split — founders, earlier holders, the new investor, the SAFE and the option pool — so the real dilution is visible, not just the headline valuation. Educational tool only, not investment advice.