Pre-money valuation refers to the value of a company before it goes public or receives external funding or financing. It includes the value of all assets, but excludes the capital that will be added in the upcoming investment round. Post-money valuation, on the other hand, refers to a company's estimated worth after outside financing and capital injections are added to its balance sheet. It includes the pre-money valuation plus the value of new equity from the investment.
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By the end of this article, you'll have the tools and knowledge needed to best prepare yourself against a company takeover. Once you understand how Downturns, Post-money, Pre-money, Valuations, and all those fancy terms work – it will be much easier to build your own founder-friendly venture like Airbnb.