How VCs use terms: pre-money & post-money to trick entrepreneurs to lower the value of their company

How can VCs use terminologies such as pre-money and post-money to trick entrepreneurs into lowering the value of their company?


VC games with valuation: When VCs say they will invest £10m at a £30m valuation it means on a post-money basis. i.e. VCs £10m will buy him 33.3% equity stake in the business. The entrepreneur might think the VC values the business at £30m pre-money and is topping up another £10m for a 25% equity stake. Entrepreneur should be presumptive and clarify by saying “I assume you mean £30m pre-money”



We have an 88% placement rate for our 4 to 8 weeks training programs conducted in 2017/18 with students going on to secure jobs at marquee investment banks such as Goldman Sachs, Credit Suisse, Morgan Stanley, Citi Bank and Deutsche Bank among others. Please send your CV to info@cityinvestmenttraining.com to check your eligibility for the course.

© City Investment Training 2020

  • YouTube - White Circle
  • Instagram - White Circle
  • White LinkedIn Icon