post-money-valuation

Vocabulary Word

Definition

'Post-money valuation' is a fancy business term. It tells us how much a company is believed to be worth, but only after new investors have injected their money into the company.

Examples in Different Contexts

In startup financing, 'post-money valuation' refers to a startup's valuation after receiving investment, crucial for calculating the equity dilution for existing shareholders. A startup founder might discuss, 'Negotiating our post-money valuation was essential to secure funding while maintaining control over the company.'

Practice Scenarios

Business

Scenario:

This new investment has increased our financial capacity significantly. We account for these changes and form a valuation accordingly.

Response:

In that case, we should compute our post-money valuation as it will show our company's worth post-investment.

Investments

Scenario:

The company successfully raised their desired funding. Now it's time to reevaluate their market stand.

Response:

The raised funds will surely affect their post-money valuation and give them a higher position in the market.