Supportable pre-money valuations for capital raises and investment rounds.
Independent pre-money valuations for founders, boards and their advisers before new shares are issued: to anchor negotiations, support directors' decisions on issue price and dilution, and protect later ESS and CGT positions.
A start-up? Start-Up Valuations is our dedicated start-up practice.
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. Oliver Group 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.
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. Oliver Group 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. Oliver Group 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
Package recommendation
Fees are fixed at engagement and never contingent on the concluded value. Oliver Group's fees are set by the annual turnover of the business: a Small Business Valuation is $1,495 + GST for turnover under $2 million, a Medium Business Valuation is $2,495 + GST for turnover between $2 million and $10 million, and a Large Business Valuation is $3,495 + GST for turnover over $10 million. Small-business reports are delivered in 2 business days and medium-business reports in 3 business days; the delivery date for a Large Business Valuation is agreed before commencement. Delivery time starts once payment and all required information have been received. Retrospective valuation dates are +$495 each and additional entities are +$795 each. The fee is fixed in writing before work begins and never depends on the concluded value.
Common questions.
What is the difference between pre-money and post-money valuation?+
Pre-money is the value of the company before the new investment; post-money is pre-money plus the funds raised. An investor putting $1m into a company at a $4m pre-money holds $1m of a $5m post-money, 20%. Term sheets usually quote pre-money, but option pools and converting notes are often counted inside it, which shifts dilution onto existing shareholders. Read the definitions, not just the headline number.
Do you need a formal valuation to raise capital in Australia?+
Not always: a genuinely arm's-length negotiated price is itself market evidence. An independent valuation earns its place where related parties participate, where the board wants issue-price support on the file, where SAFEs or notes are converting, in a down round, or where the round price will set reference points for ESS and CGT purposes.
Can a SAFE cap be used as the company's market value?+
Not on its own. A valuation cap is a negotiated ceiling on the conversion price, agreed under uncertainty: it tells you what an investor was prepared to tolerate, not what the business is worth. Caps and discounts are evidence that inform the supportable range alongside method-based analysis. Advisers sometimes treat the cap as the Division 83A market value; that shortcut rarely survives scrutiny.
Does the round price set the ESS valuation under Division 83A?+
It sets a reference point, not the answer. Investors usually buy preference shares with rights that employees' ordinary shares or options do not carry, so a lower ordinary-share value can be supportable: but the difference must be documented contemporaneously: class rights analysis, the preference stack, any discounts applied and the reasoning. Where the ESS start-up concession is relied on, your tax adviser confirms eligibility; we prepare the market value evidence.
How much does a valuation for a capital raise cost?+
Oliver Group's fee is set by the annual turnover of the business: $1,495 + GST under $2 million, $2,495 + GST from $2 million to $10 million, and $3,495 + GST over $10 million. Start-up capital raises are handled by our dedicated start-up practice, Start-Up Valuations. Fees are fixed at engagement, never contingent on the concluded value.
Talk to a valuer
Tell us what you need valued.
A fifteen-minute call confirms the package, the fixed fee and the delivery date, before you commit to anything.
0433 475 518Mon to Fri, 9am to 5:30pm AEST
Send the form and we reply within one business day. No documents needed to start.
Small Business Valuation
$1,495 + GST
For a business with annual turnover under $2 million. Signed and delivered in 2 business days. Delivery time starts once payment and all required information have been received. The fee is fixed in writing before we start and never tied to the outcome.
Larger business? Tell us in the form and we recommend the right package. All fees