Pre-Money Valuation / Post Money Valuation
The valuation of young companies is defined by two different terms. On the one hand, the pre-money value of the company. This is the valuation of the company before an investment is made. The post-money valuation, on the other hand, describes the value of the company after the investment on the basis of which the share quota for the (new) investor is determined.
For example, if the pre-money value is EUR 15 million and the investment EUR 5 million, the post-money value is EUR 20 million. The Investment of 5 Mio. € at a 20 Mio. € Post-Money Valuation will lead to a buy of 25% equity.