If pre-money valuation is 50mn, and the investor gets 25% stake after infusing 20mn, what is the post money valuation?
Simply Pre money + investment does not make sense because 50+20=70mn and 20mn is not 25% of 70mn.
Am I missing something?
| +149 | Investment Banking US League Table YTD 2024 (FactSet) | 84 | 7h | |
| +144 | Big Layoff at Barclays - 5/1/24 | 76 | 8h | |
| +87 | “Americans just work harder” | 53 | 18h | |
| +83 | Would comitting to ATL İB be stupid? Please give feedback. | 45 | 2d | |
| +83 | BOFA ALREADY TRYING TO COVER UP THEIR TRACKS | 10 | 2s | |
| +68 | Sleeping on Jefferies??? | 32 | 18h | |
| +66 | A shitter's comprehensive guide to sophomore year recruiting | 7 | 17h | |
| +59 | NEED NY RESTAURANT RECOMMENDATIONS | 38 | 2d | |
| +58 | What's up with RBC nowadays? | 24 | 15h | |
| +50 | 5-Step (Borderline Psycho) Pre-Superday Routine I Used to Land Every IB Internship Offer | 4 | 2d |
Career Resources
Get instant access to lessons taught by experienced private equity pros and bulge bracket investment bankers including financial statement modeling, DCF, M&A, LBO, Comps and Excel Modeling.
Haha you're almost there. All that matters is the fact that he infuses 20mn in return for a 25% stake. Therefore the implied post-money valuation is 80mn
Does that mean that the pre-money valuation in this instance would be 80 - 20 = 60?
If after Series A the valuation is $50mm, then yes at Series B the pre-money would be $60mm.
Thanks Greg but why does Series A have to be $50mm? Why can't it be any number? What is the link between Series A (post money?)valuation and Series B pre-money valuation?
Thank you.
You're correct - there is none.
There's no connection between the two, I just used the previous valuation that you mentioned in the OP.
^ +1
you never gave me that silver banana, god of wine ;(
Provident officiis ipsum consequatur ea. Velit cumque saepe quia. Natus est dignissimos odit dicta voluptates dignissimos. Sapiente qui esse nisi.
Molestias aut omnis consequatur et eum. Error quos quos molestias eveniet quos. Non et provident officia totam explicabo sed nulla. Dolores in officia minus quas est.
Non aliquid ipsa necessitatibus nobis aut eum eos. Autem deleniti earum laborum hic.
Laboriosam ipsa est quam deserunt. Eum occaecati quod consectetur officiis. Est eum fugiat ipsa error impedit.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...