What is pre-money and post-money valuation?

Pre-money valuation is what the company is worth before the new money comes in; post-money valuation is that figure plus the new money. An investor's stake equals their investment divided by the post-money valuation.

For example, with a pre-money valuation of 8 million dollars and a 2 million dollar investment, the post-money valuation is 10 million dollars and the investor owns 20 percent.