Valuation methods & enterprise value · Core
Pre-money valuation
Also called: pre-money value, pre-money
ELI5
Company equity value immediately before a financing.
Used in conversation
“The range matters more than a false point estimate for pre-money valuation.”
Pitch context
You will see “Pre-money valuation” in financial models, budgets, board packs and investor materials when the discussion reaches valuation methods & enterprise value.
Why it matters: In valuation methods & enterprise value, a loose definition can change rights, obligations, approval, disclosure or enforceability.
Caution
Meaning, enforceability and required process vary by jurisdiction and agreement; this definition is not legal advice.
Connected terms
- Valuation capA valuation cap governs conversion economics in a convertible instrument; a pre-money valuation prices an equity financing before new money.
- Post-money valuationPre-money value excludes the new financing; post-money value includes it under the stated transaction definition.
Sources & evidence · 9
Direct term-level sources and supporting source families.
- Y Combinator — Safe financing documentsDirect source · practitioner · checked 2026-08-16
- National Venture Capital Association — Model Legal DocumentsDirect source · institutional · checked 2026-08-16
- IFRS Foundation — IFRS GlossaryDirect source · primary · checked 2026-08-16
- U.S. Securities and Exchange Commission — Small Business Capital Formation GlossaryDirect source · primary · checked 2026-08-16
- U.S. Securities and Exchange Commission — Exempt OfferingsSupporting source family · primary · checked 2026-08-16
- Y Combinator — Series A Term Sheet TemplateSupporting source family · practitioner · checked 2026-08-16
- Financial Accounting Standards Board — FASB Accounting Standards CodificationSupporting source family · primary · checked 2026-08-16
- U.S. Small Business Administration — Break-even pointSupporting source family · primary · checked 2026-08-16
- U.S. Securities and Exchange Commission — Non-GAAP Financial Measures — Compliance and Disclosure InterpretationsSupporting source family · primary · checked 2026-08-16