Pre-money valuation: valuation basis before financing

The pre-money valuation refers to the value of a company immediately before a new round of financing, based on its current status without taking into account the new investment funds. This valuation is crucial for investors and founders to determine the percentage of the company that will be offered for a given investment amount. Establishing a clear pre-money valuation enables transparent negotiations and a fair equity distribution between existing owners and new investors, which is important for the further growth and scaling of the company.