If a VC offers you $2 million for a third of your company,what was your pre-money valuation?
A)~$2 million
B)~$3 million
C)~$4 million
D)~$6 million

Question

Quizplus · Accepted Answer

The pre-money valuation is the value of the company before the investment. If a VC offers $2 million for a third of the company, the pre-money valuation is $4 million, as the company would be valued at $6 million post-money ($4 million pre-money + $2 million investment), and $4 million represents two-thirds of that post-money valuation.

If a VC Offers You $2 Million for a Third