Pre-money / Post-money valuation question
Hey experts.
If a company raises $10mil in debt and $10mil in equity at a pre-money valuation of $100mil, what is the post-money valuation?
My guess is $120mil. Because equity value increases by the amount of cash you raise (regardless of whether it be debt or equity).
Is this correct?
Thanks.
No, it is not correct. You can't create equity value out of thin air by taking on debt.
Post-money valuation in this case would be $110mil.
EV remains unchanged irrespective of funding source.
$10m debt -> cash up, debt up -> EV unchanged $10m equity -> equity up, cash up -> EV unchanged
Post money equity valuation is $10m higher, post money EV is unchanged.
Pre money and post money always just refers to equity value. Doesn't include debt. So post money is 110.
Thanks everyone!
Numquam impedit et aspernatur occaecati cupiditate reiciendis ipsam. Velit sapiente similique officia atque accusantium. Explicabo nam voluptatum qui. Atque repellendus quia quo dolor. Repellat sunt impedit nihil architecto accusantium molestiae. Nobis ut vitae consectetur alias qui et tempore minus. Eum nulla est voluptatem assumenda qui.
Et et ut saepe repellat eos. Atque saepe voluptatibus impedit officia.
Qui eos numquam quisquam adipisci. Neque aut nisi quae aliquam voluptatem. Numquam praesentium iure rerum accusantium qui.
Possimus vitae ad ut et ut. Magnam magnam mollitia unde dicta. Laudantium quia deleniti necessitatibus distinctio magnam assumenda adipisci. Corporis eveniet tempore corporis voluptate.
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...