Dear reader,
The current VC literature states that pre- and post-money valuations differ with the contemplated aggregate investment amount.
Modigliani miller said that in an efficient market, the value of a firm is unaffected by how that firm is financed (capital structure irrelevance).
What am I missing?
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Let's say you have 0 dollars. Then I give you $100. You are now worth $100 more.
That is literally what is meant by post-money
Not sure what exactly you're asking, but post money is just a term people use to include any additional capital that is funded to the balance sheet rather than to sellers. Simple example: pre-money valuation of $110M (all goes to seller save for some fees assuming they own 100% of the business), then another $10M is funded to the balance sheet by the buyer for working capital, strategic growth projects, etc., so post money valuation is $120M.
Has nothing to do with M&M.
Then the term "valuation" is used sloppy and is in fact not a real valuation because without improving company operations by just injecting cash ceteris paribus a real EV can not increase (as mentioned in the other comment, EV excludes cash), because a cash injection ceteris paribus does not affect FCF