The difference between pre-money valuation and post-money valuation



Please answer the following questions with about 50 words or less for each questions.

1. Some start-ups are easily getting valuations worth billions of dollars even though they do not generate a consistent stream of positive cash flows.  How is this possible? Explain.

2. Explain the difference between pre-money valuation and post-money valuation.  Why is valuation important as the company raises additional rounds of financing?

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