Unlike valuing a mature company using profits or discounted cash flow, an early-stage startup’s valuation is set through negotiation — based on comparable recent deals, market size, growth rate, team strength, and how much leverage the founder has (multiple interested investors versus one). The two numbers that matter are pre-money valuation (the agreed worth before new investment) and post-money valuation (pre-money plus the new cash raised).

Valuation directly determines how much equity a founder gives up for a given check size — a higher valuation means less dilution for the same amount raised. It matters enormously to headlines and founder morale, but it isn’t purely good news at any level: a valuation set too high relative to actual growth can make the next round harder to raise, sometimes forcing a “down round” (a new round priced lower than the last one), which is demoralizing and dilutive for everyone already on the cap table.

A nuance worth knowing: press coverage of a “$X valuation” almost always means the post-money figure, not pre-money — the two are easy to conflate when reading funding news casually.

🇵🇭 Philippine Example

Voyager Innovations, the parent of PayMaya and Maya Bank, raised US$210 million in April 2022 at a reported valuation of US$1.4 billion, making it the Philippines' second unicorn (a startup valued at $1 billion or more) after Mynt, the operator of GCash, which reached unicorn status via a US$300 million round in November 2021 — the two clearest publicly disclosed unicorn valuations in the Philippine startup market to date.

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