Post-Money Valuation (Venture Capital Method)
Definition
In the venture capital method, the post-money valuation is calculated by dividing the expected exit value by the required return multiple, then adjusting for dilution. This produces the maximum post-money valuation the investor can pay and still achieve the required return multiple at the expected exit value, given the dilution assumptions applied.
Common Misapplication
The most common misapplication is calculating the venture capital method post-money valuation without applying a dilution assumption. Omitting the dilution assumption produces a higher implied post-money valuation, which overstates the investment value to the investor.
FFI Standard Reference
This term is defined and applied in Book 4, Section 4.5: The Venture Capital Method.
Related Terms
Citable URL
This term may be cited using the following permanent URL.
Full citation format: Founder Financial Infrastructure Standard, Beta v0.5, Glossary: Post-Money Valuation (Venture Capital Method). https://ffistandard.org/glossary/post-money-valuation-vc-method/. 2026.