Venture
Pre-Money Valuation
Pre-money valuation is the value assigned to a company before a new round of investment is added to its balance sheet. Post-money valuation is simply pre-money plus the new capital raised.
The distinction matters because founders and investors sometimes negotiate loosely around "valuation" without specifying which figure they mean, and the gap compounds the size of the round: on a $10M round, the difference between pre- and post-money framing is the entire round size in ownership terms.
SAFE and convertible note terms are frequently expressed as a valuation cap rather than a fixed valuation, which converts into equity at the next priced round — meaning the actual pre-money valuation for those earlier investors isn't fixed until conversion.
Example
A company valued at $20M pre-money raising a $5M round has a $25M post-money valuation; the new investors own 20% of the company ($5M ÷ $25M).