Pre/post-money math
The denominator that trips everyone the first time it matters.
What it is
Pre-money is the agreed value of the company before new money lands. Post-money is pre-money plus the investment. The new investor's ownership is their check divided by the post-money — not check divided by pre-money.
This single denominator confusion is the number-one founder error in cap-table conversations. Get the denominator wrong and every downstream number is wrong too.
Why investors care
Spanish VCs — K Fund, Samaipata, Nauta — ask "pre or post?" within the first minute of any valuation conversation. Knowing the difference cold signals you can negotiate a term sheet.
Defaulting to pre-money framing is the European norm; YC-style post-money SAFEs are the US norm. Mixing them up loses 5 percentage points in five seconds.
The formula
Investor % = Investment ÷ Post-money
Founder % after = Founder % before × (Pre ÷ Post)
The denominator for ownership is always the post-money — the bigger number.
Worked example
Samaipata offers €2M at €8M pre-money. You hold 70% going in.
Run the same €2M at €8M post-money instead: the investor takes 25%, not 20%. Five points of dilution hinge on a single word.
Common mistakes
- Dividing the check by pre-money — gives the wrong investor %.
- Subtracting investor % from founder % — dilution is multiplicative, not subtractive.
- Quoting a valuation without specifying pre or post.