# Pre-Money vs Post-Money Valuation

*Startups & Venture Capital — Finicade finance glossary*

Pre-money is what a company is agreed to be worth before new investment; post-money is that plus the money raised. The distinction determines how much you actually sell: raising $2m at a $8m pre-money means giving up 20%, while at an $8m post-money it's 25%. Confusing the two is the most common expensive mistake founders make in their first negotiation.

**Formula:** `Post-money = Pre-money + Investment; Investor % = Investment ÷ Post-money`

**Also known as:** pre-money, post-money valuation, pre and post money

**Related terms:** [Cap Table](https://finicade.com/glossary/cap-table), [Dilution](https://finicade.com/glossary/dilution), [SAFE](https://finicade.com/glossary/safe), [Valuation Cap](https://finicade.com/glossary/valuation-cap), [Option Pool](https://finicade.com/glossary/option-pool)

Source: https://finicade.com/glossary/pre-money-vs-post-money-valuation