Calculating Post-Money Valuation after Series B Funding

Hard Private Equity Valuation Venture Capital

Jessica is an analyst at a venture capital firm looking to evaluate potential portfolio investments. She needs to determine the post-money valuation of a startup that has just completed its Series B funding round. The startup raised $10 million in exchange for 25% equity ownership. Jessica wonders how to compute the company's post-money valuation based on this financing round.

Which of the following methods would Jessica use to calculate the post-money valuation of the startup?

Multiply the amount raised by the inverse of the equity ownership percentage.

Subtract the amount raised from the pre-money valuation.

Take the total equity after the round and divide by the percentage of new equity.

Hint

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% Correct91%