How the Pre and Post Money Valuation Calculator works
Every priced funding round revolves around two numbers that describe the same company at two different moments: the pre-money valuation (what the company is worth before the new cash arrives) and the post-money valuation (what it is worth immediately after). This calculator converts between the two, and derives the investor's ownership percentage and the price paid per share, using the standard formulas venture financing runs on.
The formulas
For a pre-money valuation Vpre and an investment amount I:
Post-money = Pre-money + Investment
If you instead know the post-money valuation, the same identity is rearranged: Pre-money = Post-money − Investment. Once both figures are known, the investor's ownership share is:
Ownership % = Investment ÷ Post-money × 100
And, given the fully diluted share count outstanding before the round (Spre), the price each new share costs is:
Price per share = Pre-money ÷ Spre
Dividing the investment amount by that price per share gives the number of new shares issued, which — added to the pre-investment share count — produces the fully diluted post-money share count.
Worked example
A company negotiates an $8,000,000 pre-money valuation and raises a $2,000,000 investment. Post-money valuation is $8,000,000 + $2,000,000 = $10,000,000. The investor's ownership is $2,000,000 ÷ $10,000,000 = 20%. With 10,000,000 fully diluted shares outstanding before the round, price per share is $8,000,000 ÷ 10,000,000 = $0.80, so the round issues $2,000,000 ÷ $0.80 = 2,500,000 new shares, and existing holders are diluted to 80% of the now-larger 12,500,000-share company.
What moves ownership and dilution most
- Investment size relative to pre-money valuation: a larger check against the same pre-money valuation buys more ownership and dilutes existing holders further, because ownership is investment divided by post-money, and post-money grows with the investment.
- Which figure was negotiated: a term sheet that fixes the post-money valuation (a "post-money round") gives the investor a guaranteed ownership percentage regardless of how the cap table changes before closing; a pre-money-fixed round lets ownership shift if the share count changes.
- Fully diluted share count: a higher pre-investment share count — from a larger option pool, outstanding warrants, or convertible notes counted as converted — lowers the price per share and increases the number of new shares issued for the same dollar investment, without changing the ownership percentage itself.
A note on fully diluted shares
"Fully diluted" share count means every share, option, warrant, and convertible security is counted as if already exercised or converted, even though it is not outstanding common stock yet. Investors typically negotiate ownership percentage on a fully diluted basis, so the share count you enter should include the existing option pool and any convertible instruments you are treating as converted for this round — not just issued common shares.