Pre-money Valuation
Pre-money valuation is the total estimated value of a company before it receives any new outside investment or funding.
Quick Reference:
Pre-money Valuation. Baseline Value. Starting Worth.
Expanded Definition:
The pre-money valuation is a critical negotiation point between founders and investors because it determines how much of the company an investor will receive in exchange for their cash. It is calculated based on factors like intellectual property, current revenue, market size, and the strength of the founding team. Establishing a fair pre-money valuation is the first step in determining the price per share for a new funding round.