3 ms·
$1000 = $50000 * 2%
by brent 19y ago
$1000 = $50000 * 2%
- aston 19y agoI know. That'd give a post-money valuation of $51k, though, giving you a little less than 2% of the company in the end.
- brent 19y agoIf I pay $1 for 20% of your stock, I'm saying your company is worth $5. I now have 20% worth $1. You have 80% worth $4.
- brianr 19y agoSuppose my company is worth $5 right now. If you give my company $1, it is now worth $6. ($5 assets before + $1 cash). $1 / $6 = 1/6th of the company; you have 1/6th and I have 5/6ths. If you pay $1 for 20% of the stock, that implies a $4 pre-money valuation--after adding the $1, the company is worth $5, so your share is worth 20% and mine is 80%.
- aston 19y agoThe downmods are misplaced. You're absolutely right mathwise here, you're just missing a heretofore unspoken detail. The assumption is that in an angel or VC round you'll create new shares for the investor to own. If there were no new shares, pre-money valuation would always equal post-money valuation (you're just selling shares) and all of your explanation would be fine.