Pre-money valuation

Pre-money valuation is the value attributed to a company before a new financing round is completed — excluding the new capital to be invested. It is the negotiated value that determines how much equity new investors receive for their investment: investor % = amount raised / (pre-money + amount raised). In startup valuation, pre-money results from the negotiation between objective methods (VC method, scorecard, DCF) and the relative bargaining positions of founders and investors. A higher pre-money means less dilution for existing shareholders for the same investment amount.

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Example: for a Series A of CHF 2.5 million, a fund proposes a pre-money of CHF 8.0 million (post-money CHF 10.5 million, fund gets 23.8%). If founders negotiate to CHF 10.0 million pre-money (post-money CHF 12.5 million), the fund gets 20.0% — saving founders 3.8 percentage points of dilution for the same capital raised. This difference represents CHF 950,000 of founder value at a CHF 25 million exit.

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Hectelion builds defensible pre-money valuations for founders in advance of investor negotiations, combining multiple valuation methods to anchor a credible value range.