Valuation
How startups are valued and what those numbers actually mean for your equity.
11 terms
Beginner
Post-Money Valuation
What a company is worth immediately after receiving new investment (pre-money + new capital).
Pre-Money Valuation
What a company is worth immediately before receiving new investment.
Price Per Share
The dollar value of a single share, calculated as valuation divided by total shares outstanding.
Intermediate
409A Discount
The difference between the preferred stock price and the common stock 409A valuation, typically 60-80%.
409A Valuation
An independent appraisal of common stock value that determines your option strike price.
Enterprise Value (EV)
A company's total value including debt and subtracting cash, used for comparing companies.
Fair Market Value (FMV)
The price at which a willing buyer and seller would agree to transact for a share.
Fully Diluted Valuation
Company value calculated using ALL shares, including unexercised options and unconverted instruments.
Valuation Cap
The maximum valuation at which a SAFE or convertible note converts to equity.
Valuation Multiple
A ratio (like revenue multiple) used to estimate a company's worth relative to a financial metric.
Advanced
Other categories
Definitions are intended as plain-English educational summaries. Not legal, tax, or investment advice.