pre-money

Investors almost always speak on a pre-money basis: thus, $15 million pre-money is half of $30 million pre-money.

Finger in the air, the company is worth around 700K, and 10% is worth 70K cash (ignoring the details of pre-money/post-money investment).

I believe that conversion is done pre-money, which means the angel is diluted (like all shareholders) from their initial 25% by the addition of the new money.

'Ten on thirty' means $10 million invested at a $30 million pre-money valuation, with a post-money valuation of $40 million.

So when you close your round B/C/etc, give employees 30 days or so to exercise their options at the pre-money valuation.

And that number is the pre-money (as in, the actual, now) valuation for the company.

If you're wondering, why is the options pool included in the pre-money valuation, when those shares haven't even been issued yet?

By the way, if it's pre-money, there's no reason not to have the shares today.

Potentially stupid question: If they could sell the company today at $20-30mm, why would they take a pre-money valuation of only $15mm?

'Ten on fifteen' would mean $10 million invested at $15 million pre-money, giving $25 million post and the investors 40% of the company.

(and $1.5M pre-money) But in the more probable reading of the phrase, I own 10% of the post-money $1.5M company, giving us $1.35M pre-money.

Unless it's expressly pointed out that what ever pre-money valuation is being offered must include any note conversions, then it seems relatively straightforward that the pre-money would include fully-diluted shares (typically the founders' stock and any option grants).

This has nothing to do with the terms of the note--it is simply a matter of what the investor is "valuing" when he gives a pre-money valuation.

> Peter, is stoked that he is getting his $1 million investment converted into roughly 20% Since the valuation was > 6.25m his valuation was capped at $5m, whereas the investors who are investing got a valuation of $40m "pre-money" or $50m "post-money" which are much less favorable terms than what Peter invested at.