Venture Deals · glossary
The pre-money valuation is the company’s value just before the new money, and the post-money valuation adds the new money. At the Series A they were €8,000,000 and €10,000,000, so €2,000,000 bought a fifth of the company. Schedule 2, Part B · Chapter 7
Explained in Chapter 7, Pricing the Round: Pre-Money, Post-Money and the Option Pool, of Venture Deals.
The valuation cap is a ceiling on the company value used to convert the money, not a price. Solaris's first priced round valued the company at €8,000,000, but the angels converted as if it were worth €3,000,000. Both figures are pre-money (the value before the new money goes in). The founders accepted a cap because it spared them agreeing a value at all.Read Chapter 3, SAFEs and Advance Subscriptions →
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