Price per share is the unit price at which new equity sells in a priced financing—derived from valuation and fully diluted share count before new issuance.

How it works

Standard formula: pre-money valuation divided by pre-money fully diluted shares equals new round price per share. Investment amount divided by price per share yields new investor shares. Converting SAFEs and notes applies discounted prices per their caps and discounts relative to this price.

409A valuations often reference recent price per share with adjustments for marketability and class differences. Option pool grants use strike prices tied to fair market value rules post-round.

Why it matters

• Founders: Miscounting options, warrants, or SAFE shares in the denominator changes price per share and ownership—legal and finance must reconcile before close.
• Investors: Price per share anchors anti-dilution adjustments in future down rounds.

Common mistake

Using issued-and-outstanding share count instead of fully diluted count—understates dilution and overstates price per share.

Related ideas

See price round math, post-money valuation, and 409A.