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Pre-Money Business Valuation

EAC was awarded a Business Valuation contract for a pre-revenue sporting goods company. The company was aiming to establish a pre-money value to assist in funding. Our report included detailed total market analysis, market segmentation, expected inflation in the company’s industry, total units in the market, and detailed financial statements.

‣ Industry: Sporting Goods
‣ Standard of Value: Fair Market Value

Pre-Money Valuation

A “Pre-Money” Business Valuation is a term used in the scope of securing equity financing. The pre-money valuation assists in establishing ownership structure post financing. For example, if a pre-money valuation concludes a value of $1.5MM, and the company obtains $500,000 in financing it has given up 25% ownership ($500,000/$2,000,000). The agreed upon pre-money value of a startup company is important in that the ownership does not want to relinquish too large of an ownership position in some cases.