Valuation
What Valuation means, where you will meet it and what it means for your business.
DefinitionValuation is the estimated worth of a company, expressed as pre-money before an investment and post-money after it, used to price shares in a funding round, ESOP grant or share transfer.
Investors set the pre-money valuation in the term sheet, and the post-money is pre-money plus the amount invested; the investor's stake is the investment divided by the post-money. The law also needs a valuation report whenever shares are issued at a premium: a registered valuer's report under the Companies Act, and for foreign investors a report that meets FEMA pricing rules, so shares are not issued to non-residents below fair value. ESOP exercise prices and perquisite tax depend on fair market value at grant and exercise, usually by a merchant banker or registered valuer. You meet valuation at every round, every ESOP grant and every secondary sale. What it means for you: since angel tax was abolished from FY 2024-25, a high valuation no longer creates tax on the company, but the report still has to be dated before the allotment and kept on file.
Where you will meet this term
- CFO ServicesFunded startups and growing companies that need a finance head for a few hours a week: runway, board packs, budgets and fundraise support, without a full-time hire.from ₹24,999/month
- Financial Projections & Business PlanFounders who need a 3 or 5 year financial model with stated assumptions, for investors, a bank, a grant or their own planning.from ₹24,999
- Investor Pitch DeckFounders raising pre-seed to Series A who need a deck investors finish reading, with the numbers behind it ready for the questions that follow.from ₹24,999