Ten million pre-money and ten million post-money are different prices. Your share is your check divided by the value with your cash in.
What the film says
In venture capital, a ten million dollar valuation can mean two different deals. Pre-money, or post-money. Say you invest two million at ten million. If ten is pre-money, that's the value before your cash goes in. The company is now worth twelve million. You own two out of twelve, about seventeen percent. If ten is post-money, your cash is already in that number. You own two out of ten, twenty percent. Same check. Same headline number. Over three points apart. So why do investors care? Because that share is your slice of the exit. When someone says ten million, ask: pre or post?
A simple example with round numbers, not advice. Terms vary by fund.
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