Enter all but one of the pre-money valuation, investment amount, pre-money shares, and new shares into the calculator to determine the valuation of the company after the Series B funding round; this calculator can also evaluate any of the variables given the others are known.
Series B Valuation Formula
The following formula is used to calculate the valuation of the Series B funding round:
V = (Premoney V +Investment) / (Premoney+ New)
Variables:
- Valuation is the valuation of the company after the Series B funding round
- Pre-money valuation is the valuation of the company before the Series B funding round
- Investment amount is the amount of investment in the Series B funding round
- Pre-money shares is the number of shares outstanding before the Series B funding round
- New shares is the number of new shares issued in the Series B funding round
To calculate the valuation of the company after the Series B funding round, add the pre-money valuation to the investment amount. Then, divide the result by the sum of the pre-money shares and the new shares issued in the Series B funding round.
What is a Series B Valuation?
A Series B valuation refers to the process of determining the worth of a company during its Series B round of funding. This is typically the third stage of startup financing and the second stage of venture capital financing. During this round, investors are usually more interested in the progress the company has made since its previous funding rounds, such as its user base growth, revenue, and overall market traction. The valuation is often higher than in previous rounds due to the progress and reduced risk. The valuation is determined through negotiations between the company and the investors, taking into account factors such as the company’s financial performance, market conditions, and the amount of capital being raised. The result of this valuation will determine the price per share of the company’s stock during the Series B round.
How to Calculate Series B Valuation?
The following steps outline how to calculate the Series B Valuation.
- First, determine the pre-money valuation ($).
- Next, determine the investment amount ($).
- Next, calculate the post-money valuation by adding the pre-money valuation and the investment amount.
- Finally, calculate the Series B Valuation by subtracting the pre-money valuation from the post-money valuation.
- After inserting the variables and calculating the result, check your answer with the calculator above.
Example Problem:
Use the following variables as an example problem to test your knowledge.
pre-money valuation ($) = 500,000
investment amount ($) = 200,000
