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Pre-money: What it actually means?
Pre-money valuation is the value of a company immediately before new equity investment is added. It is most commonly used in venture capital or growth funding rounds to determine how much of the company new investors will receive in exchange for their capital. Consultants will consider traction, TAM, unit economics, comparable transactions and investor appetite to support a pre-money figure. Getting this right matters because it affects dilution for existing shareholders and signals market perception of the business. A transparent rationale makes later rounds easier.
