Supportable pre-money valuations for capital raises and investment rounds.

A capital raising valuation establishes a supportable pre-money value for a company before it issues new shares to investors. It anchors negotiations, supports directors' decisions on issue price and dilution, and sets a defensible reference point for later employee share scheme and CGT positions. Prismi prepares independent, evidence-led capital raising valuations for Australian founders, boards and their advisers.

When a capital raising valuation is required

A capital raising valuation is an independent, evidence-led opinion of a company's pre-money value, commissioned when the round itself cannot be relied on as clean market evidence. A negotiated price with a genuine arm's-length investor is itself market evidence — but many raises are not clean arm's-length events. An independent valuation is warranted where the round includes related parties or existing shareholders, where the board must document why the issue price is fair to shareholders who are not participating, where SAFEs or convertible notes are converting and the cap no longer reflects the business, where a down round is contemplated, or where the round price will flow into employee share scheme and CGT positions. Common scenarios include a first priced seed or Series A round, a family-and-friends round, a strategic investor taking a stake, a bridge round between priced rounds, and a raise that coincides with an ESS grant.

Pre-money, post-money and the dilution maths

Pre-money value is the value of the company before the new capital comes in; post-money is pre-money plus the funds raised. The incoming investor's percentage equals their investment divided by the post-money value. The mechanics matter because small drafting choices move real value: an option pool created inside the pre-money dilutes existing holders rather than the incoming investor, and SAFEs or notes converting at a cap or discount add shares at conversion that dilute everyone who did not participate. Our reports model the fully diluted capital table before and after the round, so the board can see precisely who bears the dilution at the proposed price.

Method selection by stage

Capital raising valuation method selection follows the stage of the business, because pre-revenue and revenue-generating companies produce different evidence. Pre-revenue companies are generally valued by reference to comparable transactions — recent priced rounds in similar Australian businesses, adjusted for stage, sector and terms — cross-checked against the venture capital method, which works back from a defensible exit value at a required rate of return, allowing for expected future dilution. Revenue-stage businesses with a credible forecast support a discounted cash flow, tested against market multiples. SAFE caps and convertible note discounts already on foot are weighed as evidence: a valuation cap is a negotiated ceiling agreed under uncertainty, not a concluded market value, and a conversion discount is a price for early risk — both inform the supportable range, but neither concludes it on its own. The report documents which methods were applied, which were rejected and why, and concludes at the most supportable position within the range, consistent with IVS 104 and APES 225.

Directors' duties on issue price

Directors deciding to issue shares must act with care and diligence, in good faith in the company's interests and for a proper purpose (sections 180–181 of the Corporations Act 2001) — and an issue price that cannot be supported dilutes the shareholders who do not participate. Issues to related parties, to directors themselves, or at prices well below recent evidence are the fact patterns that attract oppression claims (section 232) and later shareholder disputes. A contemporaneous independent valuation on the board file evidences a considered decision on price and dilution. Prismi prepares the valuation only — we do not provide legal advice, and the board's lawyers advise on the duties themselves.

The round price and your ESS and CGT positions

A priced round is strong contemporaneous evidence of market value, and it does not stay in the data room. Employee share scheme interests are taxed under Division 83A of the ITAA 1997 by reference to market value, and options or shares granted near a round at a fraction of the round price need documented reasoning — otherwise the gap reads as understated value. The reasoning usually exists: investors typically take preference shares carrying liquidation and anti-dilution rights, while employees receive ordinary shares or options over them, and rights, minority and marketability differences legitimately separate the two values. The work is to document that bridge at the time, not reconstruct it under review, consistent with the ATO's market valuation for tax purposes guidance on evidence and methodology. The same logic applies to CGT: the round price becomes a reference point for later cost base and market value substitution questions (s 116-30 ITAA 1997) involving the same shares. Prismi prepares the valuation evidence only — we are not a registered tax agent, and your tax adviser confirms how Division 83A, any ESS start-up concession and the CGT position apply.

Documents we need

• ·Current cap table, fully diluted, including options and convertibles
• ·SAFE, convertible note and term sheet documents on foot
• ·Last 2–3 years of financial statements or start-up management accounts
• ·Financial model or forecast supporting the raise
• ·Pitch deck or information memorandum
• ·Shareholders' agreement and constitution
• ·Prior round details — price, instruments, investors
• ·Proposed ESS or option pool terms, if any

Tier recommendation

A straightforward early-stage raise with a clean cap table can be served by the Essential tier (from $1,495 + GST, 10–14 business days). Most capital raising valuations sit at the Comprehensive tier (from $3,995 + GST, 15–25 business days). Where the raise is larger, the cap table carries converting instruments and multiple classes, or the valuation will also anchor ESS and related-party positions, the Defensible Valuation File (from $8,995 + GST, 25–35 business days) is recommended. Board-level matters with contested dilution or multiple scenarios — down-round modelling, note conversion waterfalls — suit the Valuation Range & Scenario Review (from $12,995 + GST, 30–45 business days). Additional entities are $750 each, historical valuation dates add $495 per date, and rush turnaround is available at +30% where term-sheet deadlines require it. Fees are fixed at engagement and never contingent on the concluded value.