Pre-Money Valuation

外汇网2021-06-19 14:05:47 118

A slang phrased that refers to the value of a company's stock before it goes public. The term is often used by venture capitalists.

Also known as "p-money".

Taobiz explains Pre-Money Valuation

For example let's say Jim's Fabless Donut Shop is thinking of going public. If management and venture capitalists estimate the company will raise $100 million in the IPO, it is said to have $100 million in p-money.

Valuing a company's stock before it goes public is a difficult task. When venture capitalists and entrepneurs talk about p-money they have to be very careful not to fall into the trap of "counting their chickens before the eggs have hatched" or, in other words, spending money they don't actually have.

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