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fundraising

Valuation

Estimated worth of a company used to determine equity given for investment.

Valuation is the estimated worth of a company at a given point in time. Pre-money valuation is before new investment, post-money includes it. Valuation determines how much equity investors receive for their capital.

Formula

Post-Money Valuation = Pre-Money Valuation + Investment Amount

Tips

  • Valuation = Price × Shares Outstanding
  • SaaS valued at multiples of ARR
  • Balance valuation against dilution

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