Pre-Money Valuation

Pre-money valuation is the estimated worth of a company before it receives new investment or funding. It helps determine how much ownership investors will get for their money. For example, if a company is valued at $10 million pre-money and then raises $2 million in investment, its post-money valuation becomes $12 million. Essentially, pre-money valuation is the company's value right before new capital is added, serving as a baseline to understand how much the company is worth independently of recent investments.