An angel investor puts $200,000 into a startup for 20% equity. After a year, the company issues new shares raising $300,000 without changing ownership proportion. What is the post-money valuation?

Mon, 04 May 2026 02:16:53 +0000

**Why New Share Issuances Matter: Decoding Post-Money Valuation in Angel Investing** In a startup ecosystem where early investors seek meaningful stakes and companies scale strategically, understanding valuation in equity financings is critical. A scenario drawing growing attention among U.S. investors: an angel investor puts $200,000 into a startup for 20% equity—then the company issues new shares raising $300,000 without altering ownership percentages. What does this mean for the post-money valuation? And why is this topic trending now? The post-money valuation reflects the company’s total worth after receiving investment, calculated as pre-money valuation plus new funding. In this case, the investor paid $200,000 for 20%, implying a pre-money valuation of $800,000. Adding the $300,000 raised doesn’t dilute their percentage, meaning total new shares dilute others to preserve the 20% stake—indicating a fresh round of financing accepted without changing control dynamics. This nuanced structure is reshaping how early-backed startups fund growth. ---