What Is Pre-Money Bewertung?
Pre-money bewertung, or pre-money valuation, is the assessment of a company's worth before it receives new external funding or a capital injection. This critical metric in Venture Capital Finance represents the company's value based on its existing assets, intellectual property, market position, growth potential, and current operational status. It is a fundamental concept for both founders and investors as they navigate the complexities of a capital raise. The pre-money bewertung helps determine the percentage of equity an investor will receive in exchange for their investment, making it a cornerstone for structuring funding rounds for a startup.
History and Origin
The concept of valuing nascent businesses before external funding became prominent with the rise of modern Venture Capital. While informal risk capital existed earlier, the formalization of venture capital as an industry began in the mid-20th century. A pivotal moment was the establishment of the American Research and Development Corporation (ARDC) in 1946 by Georges Doriot, often called the "father of venture capitalism." ARDC was one of the first institutional private-equity investment firms to raise capital from sources beyond wealthy families to fund businesses commercializing new technologies. This institutionalization of funding for high-growth, early-stage companies necessitated a systematic approach to assessing a company's worth prior to investment, giving rise to the formal use and understanding of pre-money bewertung as a key valuation component in investment negotiations.5
Key Takeaways
- Pre-money bewertung is a company's valuation before it secures new outside investment.
- It serves as the basis for calculating the ownership stake new investors will receive.
- The valuation is crucial in negotiations between founders and investors.
- Pre-money bewertung, when combined with the investment amount, yields the post-money valuation.
- For early-stage companies, pre-money bewertung relies heavily on future projections and qualitative factors.
Formula and Calculation
The pre-money bewertung itself is typically a negotiated figure rather than one derived from a single formula, especially for early-stage companies without significant revenue. However, it is an essential component in calculating the share price for new investors and understanding the resulting dilution.
The relationship between pre-money bewertung, new investment, and post-money valuation is as follows:
To determine the price per share at which new shares will be issued, the pre-money bewertung is divided by the number of outstanding shares before the new investment:
The number of new shares issued to the investor can then be calculated:
Understanding these calculations is vital for financial modeling during a funding round.
Interpreting the Pre-Money Bewertung
Interpreting the pre-money bewertung involves understanding its implications for both the company and new investors. For a company seeking funding, a higher pre-money bewertung means less dilution for existing shareholders, including founders and early employees, as a smaller percentage of equity is exchanged for the same amount of capital. Conversely, investors aim for a lower pre-money bewertung to acquire a larger ownership stake for their investment.
The pre-money bewertung also signals market perception and the company's progress. A rising pre-money bewertung across successive funding rounds (e.g., seed funding to Series A funding) indicates growth and increased investor confidence. However, an artificially inflated pre-money bewertung can set unrealistic expectations, potentially leading to challenges in future capital raise efforts if the company's performance does not align with the initial high valuation.
Hypothetical Example
Imagine "InnovateCo," a tech startup, is seeking a Series A funding round. Before seeking new investment, the founders and their initial seed funding investors own 8 million shares. After extensive discussions with a venture capital firm, they agree on a pre-money bewertung of $20 million. The venture capital firm plans to invest $5 million.
- Calculate the new share price:
- Calculate the number of new shares issued:
- Determine the post-money valuation: Alternatively:
In this scenario, the venture capital firm now owns 2 million out of 10 million total shares (20% of the company), and the original shareholders have experienced dilution but the company has secured vital capital for growth.
Practical Applications
Pre-money bewertung is fundamentally applied in venture capital and startup fundraising. It defines the initial equity stake that new investors will receive. This valuation is a core component of the term sheet, setting the stage for the financial relationship between the company and its investors. For example, in a significant development, OpenAI was reportedly in early-stage discussions in August 2025 regarding a stock sale that could value the company at approximately $500 billion, a notable increase from its previous $300 billion valuation following an earlier funding round.4 This reflects how pre-money valuation remains a dynamic and crucial figure even for highly valued private companies.
Beyond traditional equity rounds, pre-money bewertung concepts are also relevant for instruments like convertible notes, where a future valuation event will determine the conversion price. Investors conduct extensive due diligence to arrive at an appropriate pre-money bewertung, considering factors such as market size, team experience, product development, and competitive landscape. The PitchBook-NVCA Venture Monitor serves as an authoritative quarterly report providing insights into venture capital activity, including trends in company valuation and fundraising, showcasing the ongoing relevance of these metrics in the broader financial market.3
Limitations and Criticisms
Despite its importance, pre-money bewertung, particularly for early-stage companies, faces several limitations. One primary criticism is the inherent subjectivity and lack of reliable historical financial data. Many startups are pre-revenue, meaning there is no past performance to base a quantitative valuation on, making projections speculative.2 Traditional valuation methods often rely on stable cash flows or comparable public companies, which are rarely available for young ventures.
Another drawback is the potential for inflated valuations, especially in competitive funding environments. A high pre-money bewertung can create unrealistic expectations for future performance. If a company fails to meet these projections, it may face a "down round" in subsequent capital raise, where new investment occurs at a lower valuation than the previous one, leading to significant dilution and a negative perception among employees and existing investors.1 Furthermore, the negotiation process itself can sometimes prioritize an impressive headline number over a sustainable share price that truly reflects the company's stage and risks.
Pre-Money Bewertung vs. Post-Money Valuation
Pre-money bewertung and post-money valuation are two distinct but related concepts used in private company valuation during fundraising. The fundamental difference lies in timing.
Pre-money bewertung refers to the value of a company before any new external investment is made. It represents the company's worth as it stands prior to the current funding round.
In contrast, post-money valuation is the value of the company after the new investment has been received. It essentially adds the new capital raised to the pre-money bewertung. For instance, if a company has a pre-money bewertung of $10 million and raises $2 million in new investment, its post-money valuation would be $12 million. Understanding this distinction is crucial as it directly impacts the ownership percentage new investors receive and the dilution experienced by existing shareholders.
FAQs
Why is pre-money bewertung important for startups?
Pre-money bewertung is crucial for startups because it sets the base for negotiating the terms of investment. It determines how much equity a founder gives up for a specific amount of funding and directly impacts the percentage of ownership new investors will acquire.
How is pre-money bewertung determined for early-stage companies?
For early-stage companies, pre-money bewertung is often determined through negotiation, leveraging qualitative factors such as the strength of the management team, market opportunity, intellectual property, product development stage, and potential for future growth, rather than relying solely on historical financial data. It also considers the amount of capital raise needed and comparable deals in the market.
Does pre-money bewertung affect investor returns?
Yes, pre-money bewertung directly affects investor returns. A lower pre-money bewertung means an investor acquires a larger percentage of the company for the same investment amount, potentially leading to higher returns if the company grows successfully. Conversely, a higher pre-money bewertung means a smaller initial ownership stake.
What is "valuation cap" in relation to pre-money bewertung?
A "valuation cap" is a term often seen in convertible notes or SAFEs (Simple Agreements for Future Equity). It sets a maximum pre-money bewertung at which the investor's note will convert into equity in a future qualified funding round. This protects early investors by ensuring they convert at a favorable valuation even if the company's subsequent pre-money bewertung is much higher.